Can Competition Spoil Reciprocity? - A Laboratory Experiment

Stefan Bauernschuster, Oliver Falck and Niels Große

No 2923, CESifo Working Paper Series from CESifo

Abstract: This paper investigates how group membership and competition among trustors interact with trust and trustworthiness in a laboratory one-shot trust game. To analyze these effects, we apply a 2x2 design. We induce group membership by letting subjects play coordination games with clear focal points, leading to higher investments and trustworthiness. Introducing competition leads to a decrease in trustworthiness, especially among partners. We argue that once competition comes into play, trustees perceive trustors’ investments as the outcomes of a competitive bidding process rather than good intentions, which reduces reciprocity.

Keywords: trust; reciprocity; investment game; group membership; competition (search for similar items in EconPapers)
JEL-codes: C92 G11 L14 Z13 (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_2923

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