Title

Promises and Expectations

Document Type

Discussion Paper

Publication Date

12-1-2013

CFDP Number

1931

CFDP Update Date

2016-03-01

CFDP Pages

33

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.

This document is currently not available here.

Share

COinS