Abstract
There are reasons for individuals to keep contractual promises beyond legal remedies and reputational concerns. This entry reviews the leading explanations of promise-keeping behavior as well as recent evidence for the latter as collected in laboratory experiments. In the end, it discusses avenues for future research and recent applications of the results collected so far for the design of contracts and their legal enforcement.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Balliet D (2010) Communication and cooperation in social dilemmas: a meta-analytic review. J Confl Resolut 54:39–57
Battigalli P, Dufwenberg M (2007) Guilt in games. Am Econ Rev 97:170–176
Battigalli P, Dufwenberg M (2009) Dynamic psychological games. J Econ Theory 144:1–35
Bénabou R, Tirole J (2011) Identity, morals, and taboos: beliefs as assets. Q J Econ 126:805–855
Berg J, Dickhaut J, McCabe K (1995) Trust, reciprocity, and social history. Games Econ Behav 10:122–142
Bohnet I, Frey B, Huck S (2001) More order with less law: on contract enforcement, trust, and crowding. Am Polit Sci Rev 95:131–144
Brooks R, Stremitzer A, Tontrup S (2012) Framing contracts: why loss framing increases effort. J Inst Theor Econ 168:62–82
Charness G, Dufwenberg M (2006) Promises and partnerships. Econometrica 74:1579–1601
Charness G, Dufwenberg M (2011) Participation. Am Econ Rev 101:1213–1239
Charness G, Du N, Yang C, Yao L (2013) Promises in contract design. Eur Econ Rev 64:194–208
Crawford V, Sobel J (1982) Strategic information transmission. Econometrica 50(1431):1452
Depoorter B, Tontrup S (2012) How law frames moral intuitions: the expressive effect of specific performance. Ariz Law Rev 54:673
Ederer F, Stremitzer A (2016) Promises and expectations. Cowles foundation discussion paper No. 1931
Ellingsen T, Johanesson M (2004) Promises, threats and fairness. Econ J 114:397–420
Farrell J, Rabin M (1996) Cheap talk. J Econ Perspect 10:103–118
Fried C (1981) Contract as promise. Harvard University Press, Cambridge, MA
Hoeppner S, Freund L, Depoorter B (2017) The moral-hazard effect of liquidated damages: an experiment on contract remedies. J Institutional and Theoretical Econ 173:84–105
Jensen M, Kozlovskaya M (2016) A representation theorem for guilt aversion. J Econ Behav Organ 125:148–161
Johnson N, Mislin A (2011) Trust games: a meta-analysis. J Econ Psychol 32:865–889
Kawagoe T, Narita Y (2014) Guilt aversion revisited: an experimental test of a new model. J Econ Behav Organ 102:1–9
Miettinen T (2013) Promises and conventions – an approach to pre-play agreements. Games Econ Behav 80:68–84
Ostrom E, Walker J, Gardner R (1992) Covenants with and without a sword: self-governance is possible. Am Polit Sci Rev 86:404–417
Rawls J (1971) A theory of justice. Harvard University Press, Cambridge, MA
Ross L (1977) The “false consensus effect”: an egocentric bias in social perception and attribution processes. J Exp Soc Psychol 13:279–301
Sally D (1995) Conversation and cooperation in social dilemmas: a meta-analysis of experiments from 1958 to 1992. Ration Soc 7:58–92
Shavell S (1980) Damage measures for breach of contract. Bell J Econ 11:466–490
Shavell S (1984) The design of contracts and damages for breach. Q J Econ 99:121–148
Stone R, Stremitzer A (2016) Promises, reliance, and psychological lock-in. UCLA School of Law, Law & Economics Research Paper No. 15–17
Vanberg C (2008) Why do people keep their promises? An experimental test of two explanations. Econometrica 76:1467–1480
Wilkinson-Ryan T (2010) Do liquidated damages encourage breach? A psychological experiment. Mich Law Rev 108:633–671
Wilkinson-Ryan T (2012) Transferring trust: reciprocity norms and assignment of contract. J Empir Leg Stud 9:511–535
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2019 Springer Science+Business Media, LLC, part of Springer Nature
About this entry
Cite this entry
Mittlaender, S. (2019). Keeping Promises and Contracts. In: Marciano, A., Ramello, G.B. (eds) Encyclopedia of Law and Economics. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-7753-2_696
Download citation
DOI: https://doi.org/10.1007/978-1-4614-7753-2_696
Published:
Publisher Name: Springer, New York, NY
Print ISBN: 978-1-4614-7752-5
Online ISBN: 978-1-4614-7753-2
eBook Packages: Economics and FinanceReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences