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We study the economic consequences of opportunities for dishonesty in an environment where efficiency relevant behaviour is not contractible, but rather incentivized by informal agreements in an ongoing relationship. We document the repeated interaction between a principal and an agent who,...
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communicate. We consider two variants, modelling talk about future plans and talk about past actions. The language from which … whenever possible, thereby develop a theory of credible communication. Predictions confirm the longstanding intuition for …
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