Three-Player Trust Game with Insider Communication

Roman Sheremeta and Jingjing Zhang
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Roman Sheremeta: Argyros School of Business and Economics, Chapman University

Working Papers from Chapman University, Economic Science Institute

Abstract: We examine behavior in a three-player trust game in which the first player may invest in the second and the second may invest in the third. Any amount sent from one player to the next is tripled. The third player decides the final allocation among three players. The baseline treatment with no communication shows that the first and second players send significant amounts and the third player reciprocates. Allowing insider communication between the second and the third players increases cooperation between these two. Interestingly, there is an external effect of insider communication: the first player who is outside communication sends 54% more and receives 289% more than in the baseline treatment. As a result, insider communication increases efficiency from 44% to 68%.

Keywords: three-player trust games; experiments; reciprocity; communication (search for similar items in EconPapers)
JEL-codes: C72 C91 D72 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2013
New Economics Papers: this item is included in nep-cbe, nep-cdm, nep-evo, nep-exp, nep-gth, nep-hpe and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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http://www.chapman.edu/research-and-institutions/e ... er-communication.pdf

Related works:
Journal Article: THREE-PLAYER TRUST GAME WITH INSIDER COMMUNICATION (2014)
Working Paper: Three-Player Trust Game with Insider Communication (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:chu:wpaper:13-03

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