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Do good and talk about it! Disclosure and reward of discretionary kindness

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  • Gürtler, Oliver
  • Walkowitz, Gari
  • Wiesen, Daniel

Abstract

Does it pay off for companies to disclose voluntary commitments to their customers? While voluntary commitments to enhance customers’ benefits became prevalent in many markets, systematic evidence on how customers (if at all) reward companies, which disclose such discretionary kindness, is still lacking. We analyze the consequences of endogenous disclosure of discretionary kindness in a novel experiment (N=636). We model the decision situation in a bilateral reciprocity game with asymmetric information on the vol-untariness of kindness. Experimental data show that endogenously disclosing discretionary kindness significantly triggers rewards from customers and does not backfire. Findings are robust towards variations in costs of information and the level of customers’ benefits. Survey evidence from a vignette study support our behavioral findings.

Suggested Citation

  • Gürtler, Oliver & Walkowitz, Gari & Wiesen, Daniel, 2019. "Do good and talk about it! Disclosure and reward of discretionary kindness," Journal of Economic Behavior & Organization, Elsevier, vol. 161(C), pages 323-342.
  • Handle: RePEc:eee:jeborg:v:161:y:2019:i:c:p:323-342
    DOI: 10.1016/j.jebo.2019.03.023
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    More about this item

    Keywords

    Information asymmetry; Kindness; Endogenous disclosure; Reciprocity;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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