Why do oaths work? Image concerns and credibility in promise keeping

Sorravich Kingsuwankul, Chloe Tergiman, Marie Claire Villeval

Research output: Working paper / PreprintWorking paperProfessional

Abstract

We use a laboratory experiment to understand the channels through which honesty oaths can affect behavior and credibility. Using a game with asymmetric information in a financial market setting that captures some important features of advisor-investor interactions, we manipulate the common knowledge of the promise and investigate three non-pecuniary costs of breaking an oath: co-player image costs, audience-image costs, and self-image costs. For investors oaths are neither sufficient nor necessary to generate trust: ultimately investors rely on their experience. We link laboratory results to a survey we conducted in the Netherlands where oaths are required in the banking sector.
Original languageEnglish
PublisherTinbergen Institute Discussion Paper
Publication statusPublished - 2023

Publication series

NameTI Discussion Paper Series
Volume2023-058/I

Keywords

  • Promise-keeping
  • Honesty Oaths
  • Common Knowledge
  • Deniability
  • Financial Markets
  • Laboratory Experiment

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