Will we ever see the day when the Internet serves as the primary venue for problem solving and dispute resolution? Social science research suggests that our online communication skills will improve as we learn relational behaviors based upon nonverbal cues available online. Dispute resolution and problem solving will move online, however, whether or not you and I master those skills. Our children already have developed effective online relational behaviors and can establish trust and intimacy online.
We show that bank loans are repeatedly renegotiated by the borrower in an effort to loosen contractual constraints designed to mitigate information asymmetry. The typical loan is renegotiated every eight months, or four times during the life of the contract. The frequency of renegotiation is closely linked to the restrictiveness of the initial contact and the degree of information asymmetry between borrower and lender. In addition to significantly altering the terms of the contract, renegotiation...