Contracting in the trust game

Juergen Bracht ()

MPRA Paper from University Library of Munich, Germany

Abstract: We present a simple mechanism that can be implemented in a simple experiment. In a modified trust game, the allocator can offer to pay the investor to cooperate. The mechanism is successful at implementing efficient outcomes: participants manage to achieve an efficient outcome, when this is possible, two—thirds of the time. While these results are encouraging, we find evidence that both concerns for fairness and motivation crowding out distort the incentives presented in the mechanism.

Keywords: compensation mechanism; side payment; trust game; signaling; crowding out; concerns; for equity; taste for cooperation (search for similar items in EconPapers)
JEL-codes: C92 D62 H42 (search for similar items in EconPapers)
Date: 2010-07-22
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-soc
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https://mpra.ub.uni-muenchen.de/24198/1/MPRA_paper_24198.pdf revised version (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:24136

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