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

Sorravich Kingsuwankul (1) , Chloe Tergiman (2) , Marie Claire Villeval (3)

1 VU - Vrije Universiteit Amsterdam [Amsterdam]
2 Penn State - Pennsylvania State University
3 GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne

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.

Mots clés: Promise-keeping; Honesty Oaths; Common Knowledge; Deniability; Financial Markets; Laboratory Experiment

Domaines: Economies et finances; Psychologie et comportements

Sorravich Kingsuwankul, Chloe Tergiman, Marie Claire Villeval. Why do oaths work? Image concerns and credibility in promise keeping. 2023. ⟨hal-04209489⟩