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Does players’ identification affect trust and reciprocity in the lab?

Dimitri Dubois (), Marc Willinger () and Thierry Blayac

Journal of Economic Psychology, 2012, vol. 33, issue 1, 303-317

Abstract: Reputation mechanisms are mainly based on information sharing by traders about private trading experience. Each trader can therefore rely on his own past experience as a trader and on other traders’ past experience. The former is the direct component of the reputation mechanism and the latter the indirect component (Bolton, Katok, & Ockenfels, 2004a, 2004b). We design an experiment for isolating the direct component of the reputation system and studying its effect on the level of trust and reciprocity in a population where agents play both roles (trustor and trustee). Our experiment consists on three treatments of a finitely repeated investment game (Berg, Dickhaut, & McCabe, 1995). In the reference treatment there is no reputation mechanism at all, in treatment 1 trustees can build up a direct reputation, and in treatment two players can build up a direct reputation for both roles. We find that trustees’ direct reputation has a positive effect on reciprocity, but does not affect the average trust in the population. Trust is significantly higher only when players can build up a reputation in both roles. We show that the increase in trust is mainly linked to the formation of mutual trust–reciprocity relations.

Keywords: Investment game; Trust; Reciprocity; Population; Experimental economics; Repeated game; Reputation (search for similar items in EconPapers)
JEL-codes: C72 C91 D63 (search for similar items in EconPapers)
Date: 2012
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