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Competition vs. communication: An experimental study on restoring trust

Vivian Lei, David Masclet () and Filip Vesely

Journal of Economic Behavior & Organization, 2014, vol. 108, issue C, 94-107

Abstract: Trust is fragile. It is hard to build but easy to destroy. In this paper, we explore the fragility of trust in a stylized laboratory environment. We ask whether transgression outside a direct send-and-return relationship destroys trust and, if so, whether a competition against outsiders or an apology for misdeeds helps restore it. We find that transgression significantly reduces trust and that the broken trust can be greatly restored by group competition. Communication via an apology, impersonal or not, has an insignificant impact. By contrast, offering explanations for misbehavior is as effective as group competition.

Keywords: Experiments; Trust restoration; Group competition; Communication (search for similar items in EconPapers)
JEL-codes: C90 C92 D70 D74 D80 (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:108:y:2014:i:c:p:94-107

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Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D.

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