Norm-Based Enforcement of Promises

32 Pages Posted: 13 Feb 2019 Last revised: 7 May 2020

See all articles by Rebecca Stone

Rebecca Stone

University of California, Los Angeles (UCLA) - School of Law

Alexander Stremitzer

ETH Zurich

Date Written: May 6, 2020

Abstract

There is ample evidence that people are internally motivated to keep their promises. However, it is unclear whether promises alone create a meaningful level of commitment in many economically relevant situations where the stakes are high. In a between-subject design, we ask subjects to imagine they observed as third parties a promisor breaking her promise and could punish the promisor, at a cost to themselves, for her behavior. Our results suggest that the motivations third parties have to punish promise breakers have the same structure as the moral motivations of those deciding whether or not to keep their promises. That is, the same moral reasons that motivate promisors to keep their promises make third-party observers more likely to punish promise breaking. This suggests that the determinants of promise-keeping behavior will also drive non-legal enforcement mechanisms in relational contract settings and situations where third parties can punish promisors in a decentralized fashion, such that the moral forces of promise keeping can generate commitment even when the stakes are high.

Keywords: promises, norms, first-party enforcement, second-party enforcement, altruistic punishment

JEL Classification: K12, L14, D86, D91, C91

Suggested Citation

Stone, Rebecca and Stremitzer, Alexander, Norm-Based Enforcement of Promises (May 6, 2020). UCLA School of Law, Law-Econ Research Paper No. 19-04, Available at SSRN: https://ssrn.com/abstract=3333446

Rebecca Stone (Contact Author)

University of California, Los Angeles (UCLA) - School of Law ( email )

385 Charles E. Young Dr. East
Room 1242
Los Angeles, CA 90095-1476
United States

Alexander Stremitzer

ETH Zurich ( email )

Haldeneggsteig 4
Zurich, 8092
Switzerland
+41 (44) 632 40 08 (Phone)

HOME PAGE: http://www.lawecon.ethz.ch/people/stremitzer.html

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