Assigning Intentions when Actions are Unobservable: the Impact of Trembling in the Trust Game

James Cox and Cary Deck ()

No 2006-01, Experimental Economics Center Working Paper Series from Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University

Abstract: This paper reports laboratory experiments investigating behavior when players may make inferences about the intentions behind others' prior actions based on higher- or lower-accuracy information about those actions. We investigate a trust game with first mover trembling, a game in which nature determines whether the first mover's decision is implemented or reversed. The results indicate that second movers give first movers the benefit of the doubt. However, first movers do not anticipate this response. Ultimately, it appears that subjects are thinking on at least three levels when making decisions: they are concerned with their own material well being, the trustworthiness of their counterpart, and how their own actions will be perceived.

JEL-codes: C70 C91 D64 D84 (search for similar items in EconPapers)
Pages: 20
Date: 2007-12
New Economics Papers: this item is included in nep-cbe, nep-exp, nep-gth and nep-soc
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Journal Article: Assigning Intentions when Actions Are Unobservable: The Impact of Trembling in the Trust Game (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:exc:wpaper:2006-01

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