Date Added: Mar 2010
The authors examine the influence of guilt and trust on the performance of credence goods markets. An expert can make a promise to a consumer first, whereupon the consumer can express his/her trust by paying an interaction price before the expert's provision and charging decisions. They argue that the expert's promise induces a commitment that triggers guilt if the promise is broken, and guilt is exacerbated by higher interaction prices. An experiment qualitatively confirms their predictions: most experts make the predicted promise; proper promises induce consumer-friendly behavior; and higher interaction prices increase the commitment value of proper promises.