Year: 2020
Type: article
Abstract: We obtain experimental evidence that suggests that promisors are more likely to keep promises the more they were relied on by a promisee; that this effect is anticipated by promisees, who accordingly strategically overinvest to lock promisors into keeping their promises (psychological lock-in); and therefore that legal enforcement can reduce overinvestment as promisees do not need to make use of the extralegal mechanism of psychological lock-in when the legal regime induces promisors to perform instead. These results contrast with the central prediction of the holdup literature that underinvestment results in the absence of legal enforcement.
Source: The Journal of Legal Studies
DOI: 10.1086/707562
Authors: Rebecca Stone, Alexander Stremitzer
Institutions: University of California, Los Angeles, ETH Zurich
Language: English
Subfield: Safety Research
Field: Social Sciences
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W2233923145