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Promise keeping and reliance damage

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This paper experimentally investigates the hypothesis that promise-keeping behavior is affected by the “reliance damage” that a counterpart would suffer as a result of a breach. Reliance damage is defined as the difference between the counterfactual benefit that the counterpart would have obtained h...

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Hauptverfasser: Sengupta, Arjun (VerfasserIn) , Vanberg, Christoph (VerfasserIn)
Dokumenttyp: Article (Journal)
Sprache:Englisch
Veröffentlicht: 2023
In: European economic review
Year: 2023, Jahrgang: 152, Pages: 1-12
ISSN:1873-572X
DOI:10.1016/j.euroecorev.2022.104344
Online-Zugang:Verlag, lizenzpflichtig, Volltext: https://doi.org/10.1016/j.euroecorev.2022.104344
Verlag, lizenzpflichtig, Volltext: https://www.sciencedirect.com/science/article/pii/S0014292122002240
Volltext
Verfasserangaben:Arjun Sengupta, Christoph Vanberg

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520 |a This paper experimentally investigates the hypothesis that promise-keeping behavior is affected by the “reliance damage” that a counterpart would suffer as a result of a breach. Reliance damage is defined as the difference between the counterfactual benefit that the counterpart would have obtained had they not relied on the promise and that which they would obtain following a breach. We discuss two motivational mechanisms that could drive such an effect. One is that people intrinsically dislike causing reliance damage per se. The other is that people dislike causing regret in another person. We experimentally test these ideas in the context of an experimental trust game. Our evidence is consistent with the hypothesis that promise keeping is affected by reliance damage, and that the underlying mechanism involves a desire not to cause regret in others. 
650 4 |a Obligations 
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