Investment Choice Architecture in Trust Games: When “All-in” Is Not Enough

Joaquín Gómez-Miñambres, Eric Schniter and Timothy Shields
Additional contact information
Joaquín Gómez-Miñambres: Lafayette College, Department of Economics

Working Papers from Chapman University, Economic Science Institute

Abstract: While many economic interactions feature “All-or-Nothing” options nudging investors towards going “all-in”, such designs may unintentionally affect reciprocity. We manipulate the investor’s action space in two versions of the “trust game”. In one version investors can invest either “all” their endowment or “nothing”. In the other version, they can invest any amount of the endowment. Consistent with our intentions-based model, we show that "all-or-nothing” designs coax more investment but limit investors’ demonstrability of intended trust. As a result, “all-in” investors are less generously reciprocated than when they can invest any amount, where full investments are a clearer signal of trustworthiness.

JEL-codes: C72 C90 C91 D63 D64 L51 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-gth
References: Add references at CitEc
Citations:

Downloads: (external link)
https://digitalcommons.chapman.edu/esi_working_papers/284/

Related works:
Journal Article: INVESTMENT CHOICE ARCHITECTURE IN TRUST GAMES: WHEN “ALL‐IN” IS NOT ENOUGH (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:chu:wpaper:19-24

Access Statistics for this paper

More papers in Working Papers from Chapman University, Economic Science Institute Contact information at EDIRC.
Bibliographic data for series maintained by Megan Luetje ().