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Volkswirtschaft - Open Access LMU - Teil 03/03 Podcast
Promises and Image Concerns

Promises and Image Concerns

Volkswirtschaft - Open Access LMU - Teil 03/03 vor 12 Jahren

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According to several psychological and economic studies,
non-binding communication can be an effective tool to increase
trust and enhance cooperation. This paper focuses on reasons why
people stick to a given promise and analyzes to what extent image
concerns of being perceived as a promise breaker play a role. In a
controlled laboratory experiment, we vary the ex post observability
of the promising party's action in order to test for social image
concerns. We observe that slightly more promises are kept if the
action is revealed than if it is not, yet the difference is not
significant. However, a variation in the selection of pre-defined
messages across treatments delivers another interesting finding.
While most of the promises are kept, statements of intent tend to
be broken.