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Promises, Threats and Fairness

Bibliographic Data

ID9713665
AuthorsTore Ellingsen (0000-0001-9501-0137, Stockholm School of Economics), Magnus Johannesson (0000-0001-8759-6393, Stockholm School of Economics)
Year2004
Volume114
Issue495
Pages397-420
Publication date2004-04-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueThe Economic Journal (JOURNAL)
Journal identifiersISSN: 0013-0133 • E-ISSN: 1468-0297
PublisherOxford University Press (OUP) (PUBLISHER)
DOI10.1111/j.1468-0297.2004.00214.x
OpenAlexW2152695373
LanguageEN
Citations received46
References cited38

We present experimental evidence that promises and threats mitigate the hold–up problem. While investors rely as much on their own threats as on their trading partner’s promises, the latter are more credible. Building on recent work in psychology and behavioral economics, we then present a simple model within which agents are concerned about both fairness and consistency. The model can account for several of our experimental findings. Its most striking implication is that fairmindedness strengthens the credibility of promises to behave fairly, but weakens the credibility of threats to punish unfair behavior. JEL classification: L14, C78

Business · Consistency (knowledge bases · Credibility · Economics · Law and economics · Microeconomics · Political science · Positive economics · Simple (philosophy · Work (physics · Computer Science · Corruption and Economic Development · Engineering · Experimental Behavioral Economics Studies · Law · Law, Economics, and Judicial Systems

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Unique citing works46
Citations per year2,19
Citation span2005 - 2026 (22)
Citation velocitycurrent
Highly citedNo
Citation typesNeutral: 46
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