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Words speak louder than money

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Author Info

  • Servátka, Maroš
  • Tucker, Steven
  • Vadovič, Radovan

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.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Psychology.

Volume (Year): 32 (2011)
Issue (Month): 5 ()
Pages: 700-709

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Handle: RePEc:eee:joepsy:v:32:y:2011:i:5:p:700-709

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Web page: http://www.elsevier.com/locate/joep

Related research

Keywords: Communication; Content analysis; Experimental economics; Gift giving; Investment game; Message; Trust; Trustworthiness;

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References

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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Talk, trust & inequality
    by chris dillow in Stumbling and Mumbling on 2011-04-27 11:30:45
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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Cited by:
  1. James C. Cox & Maroš Servátka & Radovan Vadovic, 2009. "Saliency of Outside Options in the Lost Wallet Game," Working Papers in Economics 09/03, University of Canterbury, Department of Economics and Finance.
  2. Martin Dufwenberg & Maroš Servátka & Radovan Vadovič, 2012. "ABC on Deals," Working Papers in Economics 12/14, University of Canterbury, Department of Economics and Finance.
  3. Andries Richter & Daan van Soest & Johan Grasman, 2013. "Contagious Cooperation, Temptation, and Ecosystem Collapse," Working Papers 2013.36, Fondazione Eni Enrico Mattei.
  4. Maroš Servátka & Steven Tucker & Radovan Vadovic, 2009. "Building Trust One Gift at a Time," Working Papers in Economics 09/11, University of Canterbury, Department of Economics and Finance.
  5. Cary Deck & Maroš Servátka & Steven Tucker, 2013. "An examination of the effect of messages on cooperation under double-blind and single-blind payoff procedures," Experimental Economics, Springer, vol. 16(4), pages 597-607, December.
  6. Ben-Ner, Avner & Putterman, Louis & Ren, Ting, 2011. "Lavish returns on cheap talk: Two-way communication in trust games," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(1), pages 1-13, February.

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