D'Acunto, Francesco; Xie, Jin; Yao, Jiaquan - 2022
events, they might agree to pay higher costs of negotiation ex ante to complete contracts. Using a unique sample of U ….S. consulting contracts and a negative shock to trust between shareholders/managers (principals) and consultants (agents) staggered … verifiable states of the world covered by contracts increase after trust drops. The results hold for several novel text …