Words speak louder than money

Maroš Servátka, Steven Tucker and Radovan Vadovic ()

Journal of Economic Psychology, 2011, vol. 32, issue 5, 700-709

Abstract: Should one use words or money to foster trust of the other party if no means of enforcing trustworthiness are available? This paper reports an experiment studying the effectiveness of two types of mechanisms for promoting trust: a costly gift and a costless message as well as their mutual interaction. We nest our findings in the standard version of the investment game. Our data provide evidence that while both stand-alone mechanisms enhance trust, a gift performs significantly worse than a message. Moreover, when a gift is combined with sending a message, it can be counterproductive.

Keywords: Communication; Content analysis; Experimental economics; Gift giving; Investment game; Message; Trust; Trustworthiness (search for similar items in EconPapers)
JEL-codes: C70 C91 (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24)

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Working Paper: Words Speak Louder Than Money (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:joepsy:v:32:y:2011:i:5:p:700-709

DOI: 10.1016/j.joep.2011.04.003

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