Property Rights Theory, Justice, and Reciprocity

Abstract What really happens when situations arise that were not anticipated in contracts? The phenomenon of quiet quitting is an example of behaviour that is legally within the bounds of the contract governing a relationship while also generating variance in performance. Common and quantifiable examples of negative reciprocity from unhappy stakeholders towards firms are hard to account for using the language of ex ante and ex post contract negotiations at the heart of property rights theory (PRT). But how well does PRT describe and predict the contractual expectations of the parties regarding rights surrendered, value created, and the adequacy of each party's share? If some amount of ex post re‐negotiation is unavoidable, we ask what contingencies determine the valence (value‐creating vs. ‐destroying) and intensity of this re‐negotiation using a well‐established micro‐behavioural lens – including concepts from social exchange theory – to better account for behaviours and outcomes not explained by PRT. We then specify how relational interdependence moderates the effect of these norms relative to PRT constructs. The result is a supplementary framework for understanding social norms and values as mechanisms for predicting behaviours and outcomes during ex post reevaluation – and ultimately for refining the role of the ‘owner’ in PRT.