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Incomplete Information Strengthens The Effectiveness Of Social Approval

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  • Matthias Greiff
  • Fabian Paetzel

Abstract

We present a theoretical model of a public good game in which the expression of social approval induces pro‐social behavior. Using a laboratory experiment with earned heterogeneous endowments, we test our model. The main hypothesis is that the expression of social approval increases cooperative behavior even if reputation building is impossible. We vary the information available and investigate how this affects the expression of social approval and individual contributions. The expression of social approval significantly increases contributions. However, the increase is smaller if additional information is provided, suggesting that social approval is more effective if subjects receive a noisy signal about others' contributions. (JEL C72, C91, D71, D83)

Suggested Citation

  • Matthias Greiff & Fabian Paetzel, 2015. "Incomplete Information Strengthens The Effectiveness Of Social Approval," Economic Inquiry, Western Economic Association International, vol. 53(1), pages 557-573, January.
    • Handle: RePEc:bla:ecinqu:v:53:y:2015:i:1:p:557-573
    DOI: 10.1111/ecin.12134
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    Cited by:

    1. Greiff, Matthias & Paetzel, Fabian, 2020. "Information about average evaluations spurs cooperation: An experiment on noisy reputation systems," Journal of Economic Behavior & Organization, Elsevier, vol. 180(C), pages 334-356.
    2. Verena Dorner & Marcus Giamattei & Matthias Greiff, 2020. "The Market for Reviews: Strategic Behavior of Online Product Reviewers with Monetary Incentives," Schmalenbach Business Review, Springer;Schmalenbach-Gesellschaft, vol. 72(3), pages 397-435, July.
    3. Greiff, Matthias & Paetzel, Fabian, 2016. "Second-order beliefs in reputation systems with endogenous evaluations – an experimental study," Games and Economic Behavior, Elsevier, vol. 97(C), pages 32-43.
    4. Natalia Maja Józefacka & Robert Podstawski & Małgorzata Barbara Płoszaj & Elżbieta Szpakiewicz & Mateusz Franciszek Kołek & Andrzej Pomianowski & Gabriela Kania & Anna Niedźwiecka & Dominika Łabno & A, 2022. "Masquerade of Polish Society—Psychological Determinants of COVID-19 Precautionary Behaviors," IJERPH, MDPI, vol. 20(1), pages 1-12, December.
    5. Matthias Greiff, 2015. "Integrating Affective Responses into Game Theory: A Dual Selves Model," MAGKS Papers on Economics 201517, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    6. Krügel, Jan Philipp & Paetzel, Fabian, 2024. "The impact of fraud on reputation systems," Games and Economic Behavior, Elsevier, vol. 144(C), pages 329-354.
    7. Krügel, Jan Philipp & Paetzel, Fabian, 2021. "The Impact of Fake Reviews on Reputation Systems and Efficiency," VfS Annual Conference 2021 (Virtual Conference): Climate Economics 242415, Verein für Socialpolitik / German Economic Association.

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    More about this item

    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
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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