Old Habits Are Hard to Change: A Case Study of Israeli Real Estate Contracts

Doron Teichman*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

10 Scopus citations

Abstract

This article presents a case study on the persistent dollarization norm in the Israeli real estate market. For many years Israeli real estate contracts have been denominated in American dollars. This contracting norm has remained surprisingly stable despite tremendous changes in the structure of the Israeli foreign currency market that severed the connection between the dollar and local inflation and added significant risks to exchange rates. Using an array of theoretical tools, I explain this puzzling phenomenon and demonstrate the centrality of social norms to the design of high-stakes contracts. Finally, I explore the interaction between social norms and the law and highlight the potential obstacles to regulating contracting norms.

Original languageAmerican English
Pages (from-to)299-330
Number of pages32
JournalLaw and Society Review
Volume44
Issue number2
DOIs
StatePublished - Jun 2010

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