Commitment to the truth creates trust in market exchange: Experimental evidence

Nicolas Jacquemet (), Stéphane Luchini (), Jason Shogren and Adam Zylbersztejn ()
Additional contact information
Stéphane Luchini: Aix-Marseille U., CNRS, EHESS, Centrale Marseille, Aix-Marseille School of Economics
Adam Zylbersztejn: Univ Lyon, Université Lyon 2, GATE UMR 5824, F-69130 Ecully, France; research fellow at Vistula University Warsaw (AFiBV), Warsaw, Poland

No 2311, Working Papers from Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon

Abstract: Social norms like the mutual belief in reciprocity facilitate economic exchange. But this reciprocity norm requires trust among traders, which can be challenging to create among strangers even with communication. The honesty oath is a time-honored mechanism that societies use to overcome this challenge – taking a solemn oath to tell the truth sends a trustworthy signal of real economic commitment given incomplete contracts. Herein we explore how the truth-telling oath creates trust within the sequential reciprocity trust game with pre-play, fixed-form, and cheap-talk communication. Four key results emerge: (1) communication under oath creates more trust and cooperative behavior; but (2) the oath induces a selection effect – it makes people more wary of using communication as a signal. (3) Although the overall net effect on cooperation is positive, the oath cannot reverse a general decay of cooperation over time. (4) By comparing the oath's performance to mild and deterrent fines for deception, we find that the oath is behaviorally equivalent to mild fines. The deterrent fine induces the highest level of cooperation.

Keywords: Trust game; cooperation; communication; commitment; deception; fine; oath (search for similar items in EconPapers)
JEL-codes: C72 D83 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-exp, nep-gth, nep-hme, nep-hrm and nep-spo
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Citations: View citations in EconPapers (1)

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https://www.gate.cnrs.fr/RePEc/2023/2311.pdf (application/pdf)

Related works:
Journal Article: Commitment to the truth creates trust in market exchange: Experimental evidence (2024)
Working Paper: Commitment to the truth creates trust in market exchange: Experimental evidence (2024)
Working Paper: Commitment to the truth creates trust in market exchange: Experimental evidence (2024)
Working Paper: Commitment to the truth creates trust in market exchange: Experimental evidence (2024)
Working Paper: Commitment to the truth creates trust in market exchange: Experimental evidence (2023)
Working Paper: Commitment to the truth creates trust in market exchange: Experimental evidence (2023)
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