Promises and expectations

Florian Ederer and Alexander Stremitzer

Games and Economic Behavior, 2017, vol. 106, issue C, 161-178

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) leads to a significant change in promisor behavior. We provide evidence that a promisor's aversion to disappointing a promisee's expectation leads her to behave more generously. We propose and estimate a simple model of conditional guilt aversion that is supported by our results and nests the findings of previous contributions as special cases.

Keywords: Promises; Expectations; Beliefs; Contracts; Guilt aversion (search for similar items in EconPapers)
JEL-codes: A13 C72 C91 D03 D64 D80 K12 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (40)

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Related works:
Working Paper: Promises and Expectations (2017)
Working Paper: Promises and Expectations (2016)
Working Paper: Promises and Expectations (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:106:y:2017:i:c:p:161-178

DOI: 10.1016/j.geb.2017.09.012

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