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Trusting behavior in a repeated investment game

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

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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Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 55 (2004)
Issue (Month): 1 (September)
Pages: 31-44

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Handle: RePEc:eee:jeborg:v:55:y:2004:i:1:p:31-44
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