Course blog for American University PERF-570, Fall 2014
Imagine for a moment that your close friend calls you up one night, and asks you to come help them change a tire in the rain. Would you go?
Now imagine that the same friend calls you up one night, asks you to help them change a tire in the rain, and offers to pay you $2 for your time. Now what do you think?
On this matter, Behavioral Economist Dan Ariely says “Complete contracts are inevitably imperfect. So what’s better: a complete contract that mutates goodwill into legal trickery, or an incomplete contract that rests on the understanding we share of appropriate and inappropriate behavior?” While there is a time and a place for nit-picky riders, and lengthy legal documents, sometimes simplicity is best. And sometimes incomplete contracts, or “handshake contracts” see the best outcome, according Ariely in his blog post In Praise of the Handshake. I would gamble to say our entire class is susceptible to being a control freak now and then (no, just me?). Its important to remember though, that detailed contracts are meant to account for all worst- case scenarios, and sometimes thats not the message that needs to be sent. Sometimes people just need the benefit of the doubt in order to produce their best work. Thoughts?