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Trust and Truth

Author

Listed:
  • Tore Ellingsen
  • Magnus Johannesson
  • Jannie Lilja
  • Henrik Zetterqvist

Abstract

In a laboratory experiment, we create relationships between pairs of anonymous subjects through a Prisoners' dilemma game. Thereafter the same subjects play a private values bargaining game with or without communication. Communication substantially increases bargaining efficiency among subjects who cooperated in the Prisoners' dilemma but has no significant effect on bargaining outcomes when one subject defected. Subjects who cooperated in the Prisoners' dilemma bid more aggressively if their opponent defected. Cooperators also lie more about their valuations when their opponent defected. The results constitute novel evidence that many people are strong reciprocators. Copyright © The Author(s). Journal compilation © Royal Economic Society 2009.

Suggested Citation

  • Tore Ellingsen & Magnus Johannesson & Jannie Lilja & Henrik Zetterqvist, 2009. "Trust and Truth," Economic Journal, Royal Economic Society, vol. 119(534), pages 252-276, January.
  • Handle: RePEc:ecj:econjl:v:119:y:2009:i:534:p:252-276
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    Cited by:

    1. Jacob Goeree & Jingjing Zhang, 2014. "Communication & competition," Experimental Economics, Springer;Economic Science Association, vol. 17(3), pages 421-438, September.
    2. Pfaff, Alexander & Vélez, Maria Alejandra, 2012. "Efficiency and equity in negotiated resource transfers: Contributions and limitations of trust with limited contracts," Ecological Economics, Elsevier, vol. 74(C), pages 55-63.
    3. López-Pérez, Raúl, 2012. "The power of words: A model of honesty and fairness," Journal of Economic Psychology, Elsevier, vol. 33(3), pages 642-658.
    4. Rosaz, Julie & Villeval, Marie Claire, 2012. "Lies and biased evaluation: A real-effort experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 84(2), pages 537-549.
    5. Julian Conrads & Mischa Ellenberger & Bernd Irlenbusch & Elia Nora Ohms & Rainer Michael Rilke & Gari Walkowitz, 2017. "Team Goal Incentives and Individual Lying Behavior," WHU Working Paper Series - Economics Group 17-02, WHU - Otto Beisheim School of Management.
    6. Galanis, Spyros & Vlassopoulos, Michael, 2014. "Concern for relative standing and deception," Discussion Paper Series In Economics And Econometrics 1403, Economics Division, School of Social Sciences, University of Southampton.
    7. Conrads, Julian & Irlenbusch, Bernd & Rilke, Rainer Michael & Walkowitz, Gari, 2013. "Lying and team incentives," Journal of Economic Psychology, Elsevier, vol. 34(C), pages 1-7.
    8. Andersson, Ola & Wengström, Erik, 2012. "Credible communication and cooperation: Experimental evidence from multi-stage Games," Journal of Economic Behavior & Organization, Elsevier, vol. 81(1), pages 207-219.
    9. López-Pérez, Raúl, 2009. "The Power of Words: Why Communication fosters Cooperation and Efficiency," Working Papers in Economic Theory 2009/01, Universidad Autónoma de Madrid (Spain), Department of Economic Analysis (Economic Theory and Economic History).
    10. repec:kap:regeco:v:52:y:2017:i:2:d:10.1007_s11149-017-9329-7 is not listed on IDEAS
    11. Robbett, Andrea, 2016. "Sustaining cooperation in heterogeneous groups," Journal of Economic Behavior & Organization, Elsevier, vol. 132(PA), pages 121-138.
    12. Xiao, Erte, 2013. "Profit-seeking punishment corrupts norm obedience," Games and Economic Behavior, Elsevier, vol. 77(1), pages 321-344.
    13. Andersson, Ola & Wengström, Erik, 2007. "More Communication, Less Cooperation: Experimental Evidence from Multi-stage Games," Working Papers 2007:4, Lund University, Department of Economics, revised 24 Nov 2010.
    14. Agnes Baeker & Mario Mechtel, 2015. "Peer Settings Induce Cheating on Task Performance," IAAEU Discussion Papers 201506, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).

    More about this item

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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