Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/282871 
Year of Publication: 
2023
Series/Report no.: 
Tinbergen Institute Discussion Paper No. TI 2023-058/I
Publisher: 
Tinbergen Institute, Amsterdam and Rotterdam
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.
Subjects: 
Promise-keeping
Honesty Oaths
Common Knowledge
Deniability
Financial Markets
Laboratory Experiment
JEL: 
C91
D01
D83
D91
Document Type: 
Working Paper

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