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Promise keeping and reliance damage

Sengupta, Arjun; Vanberg, Christoph


Christoph Vanberg


This paper experimentally investigates the hypothesis that promise-keeping behavior is affected by the "reliance damage" that a counterpart would suffer as a result of a breach. Reliance damage is defined as the difference between the counterfactual benefit that the counterpart would have obtained had they not relied on the promise and that which they would obtain following a breach. We discuss two motivational mechanisms that could drive such an effect. One is that people intrinsically dislike causing reliance damage per se. The other is that people dislike causing regret in another person. We experimentally test these ideas in the context of an experimental trust game. Our evidence is consistent with the hypothesis that promise keeping is affected by reliance damage, and that the underlying mechanism involves a desire not to cause regret in others.


Sengupta, A., & Vanberg, C. (2023). Promise keeping and reliance damage. European Economic Review, 152, Article 104344.

Journal Article Type Article
Acceptance Date Oct 15, 2022
Online Publication Date Nov 21, 2022
Publication Date 2023-02
Deposit Date Nov 28, 2022
Publicly Available Date Nov 22, 2024
Journal European Economic Review
Print ISSN 0014-2921
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 152
Article Number 104344
Keywords Promises; Obligations; Opportunity costs; Regret Trust
Public URL
Publisher URL


This file is under embargo until Nov 22, 2024 due to copyright restrictions.

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