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Promises & Partnership

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Author Info
Gary Charness (University of California, Santa Barbara)
Martin Dufwenberg

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Abstract

We examine experimentally the impact of communication on trust and cooperation. Our design admits observation of promises, lies, and beliefs. The evidence is consistent with people striving to live up to others' expectations in order to avoid guilt, as can be modeled using psychological game theory. When players exhibit such guilt aversion, communication may influence motivation and behavior by influencing beliefs about beliefs. Promises may enhance trustworthy behavior, which is what we observe. We argue that guilt aversion may be relevant for understanding strategic interaction in variety of settings, and that it may shed light on the role of language, discussions, agreements, and social norms in these contexts.

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Publisher Info
Paper provided by Department of Economics, UC Santa Barbara in its series University of California at Santa Barbara, Economics Working Paper Series with number 07-06.

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Date of creation: 19 May 2006
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Handle: RePEc:cdl:ucsbec:07-06

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Related research
Keywords: Promises; partnership; guilt aversion; psychological game theory; beliefs; trust; lies; social preferences; behavioral economics; hidden action;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Sebastian Kranz, 2006. "Moral Norms in a Partly Compliant Society," Levine's Bibliography 321307000000000092, UCLA Department of Economics. [Downloadable!]
    Other versions:
  2. Heike Hennig-Schmidt & Zhu-Yu Li & Chaoliang Yang, 2004. "Why People Reject Advantageous Offers – Non-monotone Strategies in Ultimatum Bargaining," Bonn Econ Discussion Papers bgse22_2004, University of Bonn, Germany. [Downloadable!]
  3. José Apesteguia & Martin Dufwenberg & Reinhard Selten, 2003. "Blowing the Whistle," Bonn Econ Discussion Papers bgse9_2003, University of Bonn, Germany. [Downloadable!]
    Other versions:
  4. Michele Belot, & V. Bhaskar & Jeroen van de Ven, 2006. "A Public Dilemma: Cooperation with Large Stakes and a Large Audience," Economics Discussion Papers 617, University of Essex, Department of Economics. [Downloadable!]
  5. Werner Güth & René Levínský & Tobias Uske & Thomas Gehrig, 2006. "I want to know: Willingness to pay for unconditional veto power," Papers on Strategic Interaction 2006-21, Max Planck Institute of Economics, Strategic Interaction Group. [Downloadable!]
  6. Olivier Armantier & Nicolas Treich, 2006. "Overbidding in Independant Private-Values Auctions and Misperception of Probabilities," CIRANO Working Papers 2006s-15, CIRANO. [Downloadable!]
  7. Martin Dufwenberg & Werner Gueth, 2001. "The Psychological Game of Trust," Papers on Strategic Interaction 2004-19, Max Planck Institute of Economics, Strategic Interaction Group. [Downloadable!]
  8. Topi Miettinen, 2006. "Promises and Conventions - An Approach to Pre-play Agreements," Papers on Strategic Interaction 2006-29, Max Planck Institute of Economics, Strategic Interaction Group. [Downloadable!]
  9. Holm, Håkan & Daielson, Anders, 2004. "Fairness and Promises for Sale," Working Papers 2004:18, Lund University, Department of Economics, revised 15 Aug 2005. [Downloadable!]
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