Broken Promises: An Experiment

15 Pages Posted: 1 Apr 2008 Last revised: 10 Aug 2008

See all articles by Gary Charness

Gary Charness

University of California, Santa Barbara (UCSB) - Department of Economics

Martin Dufwenberg

University of Arizona - Department of Economics

Date Written: November 5, 2007

Abstract

We test whether promises per se are effective in enhancing cooperative behavior in a form of a trust game. In Charness & Dufwenberg (2006) we found considerable effectiveness for free-form personalized pre-play statements-of-intent ("promises"), in support of a theory of belief-dependent guilt aversion. However, we were not able to reject an alternative explanation based on a belief-independent cost-of-lying. We now adapt our old design and replace the free-form messages with an opportunity for a bare promise-only message. If both forms of promises are equally effective, this would be consistent with a cost-of-lying explanation. However, in sharp contrast to previous results, we find that these bare promise-only messages lead to behavior that is much the same as when no messages are feasible. Further, beliefs are unaffected, in contrast with the change in beliefs we found with personalized promises. This provides evidence for belief-dependent guilt aversion over cost-of-lying.

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

JEL Classification: A13, B49, C72, C91, D63, D64, J41

Suggested Citation

Charness, Gary and Dufwenberg, Martin, Broken Promises: An Experiment (November 5, 2007). Available at SSRN: https://ssrn.com/abstract=1114404 or http://dx.doi.org/10.2139/ssrn.1114404

Gary Charness (Contact Author)

University of California, Santa Barbara (UCSB) - Department of Economics ( email )

2127 North Hall
Santa Barbara, CA 93106
United States
805-893-2412 (Phone)
805-893-8830 (Fax)

Martin Dufwenberg

University of Arizona - Department of Economics ( email )

McClelland Hall
Tucson, AZ 85721-0108
United States

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