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Trusting behavior in a repeated investment game

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  • Cochard, Francois
  • Nguyen Van, Phu
  • Willinger, Marc

Abstract

We compare a seven period repeated investment game to the one-shot investment game. On an average, in the repeated game, player A (the "trustor") sends more and player B (the "trustee") returns a larger percentage than in the one-shot game. Both the amount sent and the percentage returned increase up to period 5 and drop sharply thereafter. The "reciprocity hypothesis" for B players' behavior is compatible with the first five periods, but in the two end periods, most B players behaved strategically by not returning. The "reciprocity hypothesis" for A players' behavior is compatible for all periods of the game.
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Suggested Citation

  • Cochard, Francois & Nguyen Van, Phu & Willinger, Marc, 2004. "Trusting behavior in a repeated investment game," Journal of Economic Behavior & Organization, Elsevier, vol. 55(1), pages 31-44, September.
  • Handle: RePEc:eee:jeborg:v:55:y:2004:i:1:p:31-44
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