Much apparent contractual dealing is actually regulated by informal trust devices

Evidence

It has been so taken for granted that contract enables cooperative dealings, even absent trust, that a recent literature has grown up to say that much of apparent contractual dealing is in fact regulated by informal devices (see, for example, Macauley 1963; Ellickson 1991; Rousseau 1995) and even that legal regulation hampers some contractual possibilities (Bohnet, Frey, and Huck 2001). Hence many contracts and, even more, many details of contracts are often handled through trust and trustworthiness. — Russell Hardin, Trust and Trustworthiness, 840

Categorization

• XREF: Directly builds on Milgrom’s law-merchant work on reputation and informal enforcement; also resonates with Paul Milgrom read earlier. — connects to: Informal trust norms once governed the repo market in place of legal contracts — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 1295
• DEFINE: This is the core Hardin claim: contract substitutes for (and is often undergirded by) trust rather than replacing it.