IDEAS home Printed from https://ideas.repec.org/p/chu/wpaper/09-08.html
   My bibliography  Save this paper

Multi-Level Trust Game with “Insider” Communication

Author

Listed:
  • Roman M. Sheremeta

    (Argyros School of Business and Economics, Chapman University)

  • Jingjing Zhang

    (Department of Economics, McMaster University)

Abstract

This experiment studies the internal and external effects of communication in a multilevel trust game. In this trust game, the first player can send any part of his endowment to the second player. The amount sent gets tripled. The second player decides how much to send to the third player. The amount is again tripled, and the third player then decides the allocation among the three players. The baseline treatment with no communication shows that the first and second players send significant amounts and the third player reciprocates. When we allow communication only between the second and third players, the amounts sent and returned between these two increase. The new interesting finding is that there are external effects of communication: the first player who is outside communication sends 60% more and receives 140% more than in the no communication treatment. As a result, social welfare and efficiency increase from 48% to 73%.

Suggested Citation

  • Roman M. Sheremeta & Jingjing Zhang, 2009. "Multi-Level Trust Game with “Insider” Communication," Working Papers 09-08, Chapman University, Economic Science Institute.
    • Handle: RePEc:chu:wpaper:09-08
    as

    Download full text from publisher

    File URL: http://www.chapman.edu/ESI/wp/InsiderCommunication-Sheremeta.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Servátka, Maroš & Tucker, Steven & Vadovič, Radovan, 2011. "Words speak louder than money," Journal of Economic Psychology, Elsevier, vol. 32(5), pages 700-709.
    2. Jingnan (Cecilia) Chen & Daniel Houser, 2013. "Promises and Lies: An Experiment on Detecting Deception," Working Papers 1038, George Mason University, Interdisciplinary Center for Economic Science, revised Feb 2013.

    More about this item

    Keywords

    multi-level trust games; experiments; reciprocity; communication;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:chu:wpaper:09-08. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Megan Luetje (email available below). General contact details of provider: https://edirc.repec.org/data/esichus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.