Trusting behavior in a repeated investment game
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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