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Do good and talk about it! Disclosure and reward of discretionary kindness

Oliver Gürtler (), Gari Walkowitz and Daniel Wiesen

Journal of Economic Behavior & Organization, 2019, vol. 161, issue C, 323-342

Abstract: Does it pay off for companies to disclose voluntary commitments to their customers? While voluntary commitments to enhance customers’ benefits became prevalent in many markets, systematic evidence on how customers (if at all) reward companies, which disclose such discretionary kindness, is still lacking. We analyze the consequences of endogenous disclosure of discretionary kindness in a novel experiment (N=636). We model the decision situation in a bilateral reciprocity game with asymmetric information on the vol-untariness of kindness. Experimental data show that endogenously disclosing discretionary kindness significantly triggers rewards from customers and does not backfire. Findings are robust towards variations in costs of information and the level of customers’ benefits. Survey evidence from a vignette study support our behavioral findings.

Keywords: Information asymmetry; Kindness; Endogenous disclosure; Reciprocity (search for similar items in EconPapers)
JEL-codes: C91 D82 (search for similar items in EconPapers)
Date: 2019
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Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D.

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