Document Type

Response or Comment

Publication Date

2007

Publication Information

163 J. Inst. & Theoretical Econ. 26 (2007)

Abstract

It is possible that contract default rules, whose relevance is contingent upon parties' agreement to contract, differ from other default states. Parties therefore might not perceive contingent contractual defaults as relevant reference points. Ironically, however, Sloof, Oosterbeek and Sonnemans' (SOS) "default contract" applied inevitably whenever proposed and whenever Respondents rejected a non-default proposal, bearing greater resemblance to a legal right than to a contractual default. Thus, the contingency of typical contractual defaults cannot account for the No Bias Finding. Other aspects of the SOS experimental design, on the other hand, may explain the No Bias Finding.

Comments

Avishalom Tor joined the faculty at Notre Dame Law School in 2011.

Reprinted with permission of Journal of Institutional and Theoretical Economics.

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