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

Nicolas Jacquemet (), Jason Shogren, Adam Zylbersztejn () and Stéphane Luchini ()
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Adam Zylbersztejn: GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne - ENS de Lyon - École normale supérieure de Lyon - Université de Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet - Saint-Étienne - CNRS - Centre National de la Recherche Scientifique
Stéphane Luchini: AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

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: fine; Trust game; cooperation; communication; commitment; deception; oath (search for similar items in EconPapers)
Date: 2023-07-01
New Economics Papers: this item is included in nep-evo, nep-exp, nep-gth and nep-soc
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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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Persistent link: https://EconPapers.repec.org/RePEc:hal:cesptp:halshs-04391214

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