Promises and Expectations
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 that the promise will be kept) leads to a significant change in promisor behavior. We provide clean evidence that a promisor's aversion to disappointing a promisee's expectation leads her to keep her promise. We propose a simple theory of lexicographic promise keeping that is supported by our results and nests the findings of previous contributions as special cases.
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- Jordi Brandts & Gary Charness, 1998. "Hot vs. cold: Sequential responses and preference stability in experimental games," Economics Working Papers 321, Department of Economics and Business, Universitat Pompeu Fabra.
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- Beck, Adrian & Kerschbamer, Rudolf & Qiu, Jianying & Sutter, Matthias, 2013. "Shaping beliefs in experimental markets for expert services: Guilt aversion and the impact of promises and money-burning options," Games and Economic Behavior, Elsevier, vol. 81(C), pages 145-164.
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