. We show that an audit policy that induces shame on the evaders favors compliance. …

depending on whether their preferences exhibit desert elation or desert guilt. Our notion of desert generalizes distributional … guilt generates a continuum of symmetric equilibria. Equilibrium effort can lie above or below the level in the absence of … desert, so desert guilt generates behavior consistent with both positive and negative reciprocity and may underpin social …

We examine the influence of guilt and trust on the performance of credence goods markets. An expert can make a promise …’s provision and charging decisions. We 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 our predictions: (1) most …