Promises and Expectations

Florian Ederer and Alexander Stremitzer ()

No 1931, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: We investigate why people keep their promises in the absence of external enforcement mechanisms and reputational effects. In a controlled laboratory experiment we show that exogenous variation of second-order expectations (promisors' expectations about promisees' expectations that the promise will be kept) leads to a significant change in promisor behavior. We provide clean evidence that a promisor's aversion to disappointing a promisee's expectation leads her to keep her promise. We propose a simple theory of lexicographic promise keeping that is supported by our results and nests the findings of previous contributions as special cases.

Keywords: Promises; Expectations; Beliefs; Contracts (search for similar items in EconPapers)
JEL-codes: A13 C72 C91 D03 D64 K12 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2013-12, Revised 2016-03
New Economics Papers: this item is included in nep-cbe, nep-evo and nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Related works:
Journal Article: Promises and expectations (2017)
Working Paper: Promises and Expectations (2017)
Working Paper: Promises and Expectations (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:cwl:cwldpp:1931

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