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Broken Promises: An Experiment

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  • Charness, Gary B
  • Dufwenberg, Martin

Abstract

We test whether promises per se are effective in enhancing cooperative behavior in a form of trust game. In a new treatment, rather than permitting free-form messages, we instead allow only a bare promise-only message to be sent (or not). We find that bare promises are much less effective in achieving good social outcomes than free-form messages; in fact, bare promise-only messages lead to behavior that is much the same as when no messages are feasible. Our design also permits us to test the predictions of guilt aversion against the predictions of lying aversion. Our experimental results provide evidence that mainly supports the guilt-aversion predictions, but we also find some support for the presence of lying aversion.

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Bibliographic 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 qt6836m74q.

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Date of creation: 06 Aug 2008
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Handle: RePEc:cdl:ucsbec:qt6836m74q

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Related research

Keywords: Behavioral economics; cheap talk; communication; cost-of-lying; credibility; guilt aversion; psychological game theory; promises;

References

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  1. Russell Cooper & Douglas V. DeJong & Robert Forsythe & Thomas W. Ross, 1989. "Communication in the Battle of the Sexes Game: Some Experimental Results," RAND Journal of Economics, The RAND Corporation, The RAND Corporation, vol. 20(4), pages 568-587, Winter.
  2. Ellingsen, Tore & Johannesson, Magnus & Tjøtta, Sigve & Torsvik, Gaute, 2007. "Testing Guilt Aversion," Working Paper Series in Economics and Finance, Stockholm School of Economics 683, Stockholm School of Economics.
  3. Gary Charness & Martin Dufwenberg, 2006. "Promises and Partnership," Econometrica, Econometric Society, Econometric Society, vol. 74(6), pages 1579-1601, November.
  4. Jordi Brandts & Gary Charness, 2003. "Truth or Consequences: An Experiment," Management Science, INFORMS, INFORMS, vol. 49(1), pages 116-130, January.
  5. V. Crawford & J. Sobel, 2010. "Strategic Information Transmission," Levine's Working Paper Archive 544, David K. Levine.
  6. Crawford, Vincent, 1998. "A Survey of Experiments on Communication via Cheap Talk," Journal of Economic Theory, Elsevier, Elsevier, vol. 78(2), pages 286-298, February.
  7. Jerry R. Green & Nancy L. Stokey, 1980. "A Two-Person Game of Information Transmission," Discussion Papers, Northwestern University, Center for Mathematical Studies in Economics and Management Science 418, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  8. Charness, Gary B & Rabin, Matthew, 2001. "Understanding Social Preferences With Simple Tests," University of California at Santa Barbara, Economics Working Paper Series, Department of Economics, UC Santa Barbara qt0dc3k4m5, Department of Economics, UC Santa Barbara.
  9. Navin Kartik, 2008. "Strategic Communication with Lying Costs," 2008 Meeting Papers, Society for Economic Dynamics 350, Society for Economic Dynamics.
  10. Tore Ellingsen & Magnus Johannesson, 2004. "Promises, Threats and Fairness," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 114(495), pages 397-420, 04.
  11. Avner Ben-Ner & Louis Putterman & Ting Ren, 2007. "Lavish Returns on Cheap Talk: Non-binding Communication in a Trust Experiment," Working Papers, Brown University, Department of Economics 2007-15, Brown University, Department of Economics.
  12. Geanakoplos, John & Pearce, David & Stacchetti, Ennio, 1989. "Psychological games and sequential rationality," Games and Economic Behavior, Elsevier, Elsevier, vol. 1(1), pages 60-79, March.
  13. Andersen, Steffen & Fountain, John & Harrison, Glenn W. & Rutström, Elisabet, 2009. "Eliciting Beliefs," Working Papers, Copenhagen Business School, Department of Economics 03-2009, Copenhagen Business School, Department of Economics.
  14. Uri Gneezy, 2005. "Deception: The Role of Consequences," American Economic Review, American Economic Association, American Economic Association, vol. 95(1), pages 384-394, March.
  15. Cooper, Russell, et al, 1992. "Communication in Coordination Games," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 107(2), pages 739-71, May.
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Citations

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Cited by:
  1. Julie Rosaz & Marie-Claire Villeval, 2012. "Lies and Biased Evaluation: A Real-Effort Experiment," Post-Print, HAL halshs-00617120, HAL.
  2. Schütte, Miriam & Thoma, Carmen, 2014. "Promises and Image Concerns," Discussion Papers in Economics, University of Munich, Department of Economics 20861, University of Munich, Department of Economics.
  3. Beck, Adrian & Kerschbamer, Rudolf & Qiu, Jianying & Sutter, Matthias, 2010. "Guilt from Promise-Breaking and Trust in Markets for Expert Services – Theory and Experiment," Working Papers in Economics, University of Gothenburg, Department of Economics 436, University of Gothenburg, Department of Economics.
  4. Serra Garcia, M. & Damme, E.E.C. van & Potters, J.J.M., 2010. "Which Words Bond? An Experiment on Signaling in a Public Good Game (replaced by CentER DP 2011-139)," Discussion Paper, Tilburg University, Center for Economic Research 2010-33, Tilburg University, Center for Economic Research.
  5. Cooper, David J. & Kühn, Kai-Uwe, 2009. "Communication, Renegotiation, and the Scope for Collusion," CEPR Discussion Papers, C.E.P.R. Discussion Papers 7563, C.E.P.R. Discussion Papers.
  6. repec:hal:cesptp:halshs-00845123 is not listed on IDEAS
  7. Lenton, Pamela & Mosley, Paul, 2011. "Incentivising trust," Journal of Economic Psychology, Elsevier, Elsevier, vol. 32(5), pages 890-897.
  8. repec:hal:journl:halshs-00505164 is not listed on IDEAS

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