A society where people abide by contracts 80% of the time is not 80% as good as a society where people abide by contracts 100% of the time; most of the societal value of trust (e.g. decreasing transaction costs) doesn’t seem to manifest until people are pretty close to 100% trustworthy.
I don’t agree since a society without contracts would be very, very bad. Still you ask an overall excellent question.
Yes, a society without contracts is very very bad. But the difference in badness between 100% and 99% compliance is much greater than between 80% and 79% compliance.
I don’t agree since a society without contracts would be very, very bad. Still you ask an overall excellent question.
Yes, a society without contracts is very very bad. But the difference in badness between 100% and 99% compliance is much greater than between 80% and 79% compliance.
I don’t understand your objection. What good would (written) contracts be if everyone always kept their word anyway?
Verbal agreements can be contracts.