Whatever you say, your reputation precedes you: Observation and cheap talk in the trust game
Behavior in trust games has been linked to general notions of trust and trustworthiness, important components of social capital. In the equilibrium of a trust game, the investor does not invest, foreseeing that the allocator would keep all of the returns. We use a human-subjects experiment to test the effects of changes to the game designed to increase cooperation and efficiency. We add a pre-play stage in which the investor receives a cheap-talk message from the allocator, observes the allocator's previous decision, or both. None of these changes alter the game's theoretical predictions. We find that allowing observation results in substantially higher cooperation and efficiency, but cheap talk has little effect.
Year of publication: |
2009
|
---|---|
Authors: | Bracht, Juergen ; Feltovich, Nick |
Published in: |
Journal of Public Economics. - Elsevier, ISSN 0047-2727. - Vol. 93.2009, 9-10, p. 1036-1044
|
Publisher: |
Elsevier |
Keywords: | Experiment Trust game Cheap talk Observation Mechanism |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
Efficiency in the Trust Game: an Experimental Study of Preplay Contracting
Bracht, Juergen, (2006)
-
Whatever you say, your reputation precedes you : observation and cheap talk in the trust game
Bracht, Juergen, (2009)
-
Efficiency in the trust game : an experimental study of precommitment
Bracht, Juergen, (2008)
- More ...