When and Why Individuals Obey Contracts: Experimental Evidence of Consent, Compliance, Promise, and Performance

Abstract:     
This article reports the results of an online experiment that suggest that individuals are more likely to comply with contracts they participated in negotiating (even marginally) than with ones they did not and that pre-consent notice of a contract term increases the likelihood of compliance with that term. The experiment also measures the relative effectiveness of four framings (legal, moral, social, and instrumental) of requests to continue to perform an undesirable task/contract term, as compared to a generic request in the absence of a contract. The moral framing was the most effective at inducing performance. A positivistic legal framing (absent monetary sanctions) was significantly less effective than were other framings and only marginally less so than was a generic request to continue performing the task in the absence of a contract.

Number of Pages in PDF File: 34

Keywords: contract, form-adhesive, experiment, obedience, morality, moral, contracts, mandatory, arbitration, relational, economic, behavioral, EULA, license agreement

JEL Classification: C93, D03, D86, K12, Z13

Accepted Paper Series