Promises and Expectations
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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.
Ederer, Florian and Stremitzer, Alexander, "Promises and Expectations" (2013). Cowles Foundation Discussion Papers. 2329.