Words Speak Louder Than Money

Maroš Servátka, Steven Tucker and Radovan Vadovic ()

Working Papers in Economics from University of Canterbury, Department of Economics and Finance

Abstract: This paper reports on an experiment studying the effectiveness of two types of mechanisms for promoting trust: pecuniary and non-pecuniary as well as their mutual interaction. Our data provide evidence that both mechanisms significantly enhance trust in comparison to the standard investment game. However, we find that the pecuniary mechanism performs significantly worse than the non-pecuniary one. Our results also point to the fact that pecuniary mechanism, which depends on monetary incentives, can be counterproductive when combined with mechanism which relies primarily on psychological incentives.

Keywords: Communication; Deposit; Experimental economics; Trust; Trustworthiness (search for similar items in EconPapers)
JEL-codes: C70 C91 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2008-10-29
New Economics Papers: this item is included in nep-cbe, nep-exp, nep-gth and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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https://repec.canterbury.ac.nz/cbt/econwp/0818.pdf (application/pdf)

Related works:
Journal Article: Words speak louder than money (2011)
Working Paper: Words Speak Louder Than Money (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:cbt:econwp:08/18

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