Guilt from Promise-Breaking and Trust in Markets for Expert Services: Theory and Experiment

Adrian Beck (), Rudolf Kerschbamer, Jianying Qiu and Matthias Sutter
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Adrian Beck: University of Innsbruck

No 4827, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We examine the influence of guilt and trust on the performance of credence goods markets. An expert can make a promise to a consumer first, whereupon the consumer can express her trust by paying an interaction price before the expert’s provision and charging decisions. We argue that the expert’s promise induces a commitment that triggers guilt if the promise is broken, and guilt is exacerbated by higher interaction prices. An experiment qualitatively confirms our predictions: (1) most experts make the predicted promise; (2) proper promises induce consumer-friendly behavior; and (3) higher interaction prices increase the commitment value of proper promises.

Keywords: reciprocity; experts; promises; guilt; trust; credence goods (search for similar items in EconPapers)
JEL-codes: C72 C91 D82 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2010-03
New Economics Papers: this item is included in nep-exp and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published - significantly revised version published as 'Shaping Beliefs in Experimental Markets for Expert Services: Guilt Aversion and the Impact of Promises and Money-Burning Options' in: Games and Economic Behavior, 2013, 81, 145-164

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Working Paper: Guilt from Promise-Breaking and Trust in Markets for Expert Services – Theory and Experiment (2010)
Working Paper: Guilt from Promise-Breaking and Trust in Markets for Expert Services - Theory and Experiment (2010)
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