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Can Competition Spoil Reciprocity? - A Laboratory Experiment

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  • Stefan Bauernschuster
  • Oliver Falck
  • Niels Große

Abstract

This paper investigates how group membership and competition among trustors interact with trust and trustworthiness in a laboratory one-shot trust game. To analyze these effects, we apply a 2x2 design. We induce group membership by letting subjects play coordination games with clear focal points, leading to higher investments and trustworthiness. Introducing competition leads to a decrease in trustworthiness, especially among partners. We argue that once competition comes into play, trustees perceive trustors’ investments as the outcomes of a competitive bidding process rather than good intentions, which reduces reciprocity.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2010/wp-cesifo-2010-01/cesifo1_wp2923.pdf
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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2923.

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Date of creation: 2010
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Handle: RePEc:ces:ceswps:_2923

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Related research

Keywords: trust; reciprocity; investment game; group membership; competition;

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References

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Cited by:
  1. Hellberg-Bahr, Anneke & Spiller, Achim, 2012. "How to Treat Farmers Fairly? Results of a Farmer Survey," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IAMA), vol. 15(3).

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