Crowding out in an indefinitely repeated Asymmetric Trust Game
AbstractIn this paper we introduce an alternative version of the trust game by Dasgupta (1988) and Kreps (1990) that allows for asymmetric information. We use this version to study the effect of checking on the trusteeâ€™s behaviour, checking is a control option the trustor can decide to use and that takes place after both trustor and trustee made their initial decisions. â€˜Checkingâ€™ differs in this respect from the often in the literature found â€˜monitoringâ€™ that allows the trustor to control the trusteeâ€™s behaviour before the trustee makes his decision. The game theoretical analysis suggests that checking increases cooperation. The experimental results show that this is only true for the selfish part of the trustee population. Honest trustee react negatively to checking, which is more in line with crowding out theory.
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Bibliographic InfoPaper provided by Utrecht School of Economics in its series Working Papers with number 06-21.
Length: 34 pages
Date of creation: Dec 2006
Date of revision:
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-05-19 (All new papers)
- NEP-CBE-2007-05-19 (Cognitive & Behavioural Economics)
- NEP-EXP-2007-05-19 (Experimental Economics)
- NEP-GTH-2007-05-19 (Game Theory)
- NEP-SOC-2007-05-19 (Social Norms & Social Capital)
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