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Regular version of the site

Article

Do good and talk about it! Disclosure and Reward of Discretionary Kindness

Journal of Economic Behavior and Organization. 2019. Vol. 161. P. 323-342.
Gürtler O., Walkowitz G., Wiesen D.

Does it pay off for companies to disclose voluntary commitments to their customers?
While voluntary commitments to enhance customers’ benefits became prevalent in many
markets, systematic evidence on how customers (if at all) reward companies, which
disclose such discretionary kindness, is still lacking. We analyze the consequences of
endogenous disclosure of discretionary kindness in a novel experiment (N = 636). We
model the decision situation in a bilateral reciprocity game with asymmetric information
on the vol-untariness of kindness. Experimental data show that endogenously disclosing
discretionary kindness significantly triggers rewards from customers and does not backfire.
Findings are robust towards variations in costs of information and the level of customers’
benefits. Survey evidence from a vignette study support our behavioral findings.