Promise-keeping, norms and behavior

Funded by a National Science Foundation REU Grant, Erin Krupka’s project will examine promise-keeping and fairness norms using the mortgage crisis as a backdrop. This project draws on experimental economics and social psychology in addition to testing for the existence of social norms, thus facilitating the measurement of causal effects of ethical norms on economic decision making.

Start date: 3/1/2012
End date: 2/28/2015

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Nearly 25 percent of U.S. homeowners owe more on their homes than the houses are worth. Although researchers find that some underwater borrowers who could continue to pay their mortgages strategically default, the vast majority continue to pay. Many homeowners do so out of a combined sense of fear, shame and a moral code to honor promises made. But what happens when someone is allowed to renegotiate a promise? Or if there is ambiguity about what will happen in the future?

The project will enlist an REU student to participate in research and gain experience in all phases of the project, from conducting literature reviews, to the design and implementation of the laboratory experiments, to data analysis. The research will utilize human subject laboratory experiments, with a variation on the experiment examining a psychological aspect about promise keeping—namely that it may be specific to the person whom the promise was made to.

A second set of experiments will examine norms more broadly. These experiments will use a method for identifying social norms based on the property that they reflect collective perceptions regarding the appropriateness of behaviors. By discovering an understanding about how promise-keeping and fairness norms affect behavior, this project will provide new insight into important social institutions and practices.

Grants

REU Site: Incentive-Centered Design, National Science Foundation: $116,667

 

The National Science Foundation is an independent federal agency created by Congress in 1950 "to promote the progress of science; to advance the national health, prosperity, and welfare; to secure the national defense…"