Document Type
Discussion Paper
Publication Date
12-1-2013
CFDP Number
1931R
CFDP Revision Date
2017-11-01
CFDP Update Date
2016-03-01
CFDP Pages
37
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.
Recommended Citation
Ederer, Florian and Stremitzer, Alexander, "Promises and Expectations" (2013). Cowles Foundation Discussion Papers. 2329.
https://elischolar.library.yale.edu/cowles-discussion-paper-series/2329