Transferring Trust: Reciprocity Norms and Assignment of Contract

41 Pages Posted: 10 Jul 2010 Last revised: 15 Dec 2011

See all articles by Tess Wilkinson‐Ryan

Tess Wilkinson‐Ryan

University of Pennsylvania Carey Law School

Date Written: November 22, 2011

Abstract

This paper presents four experiments testing the prediction that assignment of contract rights erodes the moral obligation to perform. The first three studies used an experimental laboratory game designed to model contractual exchange. Players in the games were less selfish with a previously-generous partner than with third-party player who had purchased the right to the original partner’s expected return. The fourth study used a web-based questionnaire, and found that subjects reported that they would require less financial incentive to breach an assigned contract than a contract held by the original promisee. The results of these four experiments provide support for the proposition that a permissible and apparently neutral transfer of a contractual right may nonetheless reduce the likelihood or quality of performance by weakening the norm of reciprocity.

Keywords: Contract, Weak Sanction, Social Norm

Suggested Citation

Wilkinson-Ryan, Tess, Transferring Trust: Reciprocity Norms and Assignment of Contract (November 22, 2011). Journal of Empirical Legal Studies, Forthcoming, U of Penn, Inst for Law & Econ Research Paper No. 10-14, 5th Annual Conference on Empirical Legal Studies Paper, Available at SSRN: https://ssrn.com/abstract=1636802

Tess Wilkinson-Ryan (Contact Author)

University of Pennsylvania Carey Law School ( email )

3501 Sansom Street
Philadelphia, PA 19104
United States

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