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Lavish returns on cheap talk: Two-way communication in trust games

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Listed author(s):
  • Ben-Ner, Avner
  • Putterman, Louis
  • Ren, Ting

Abstract

We conduct trust game experiments in which subjects can sometimes exchange proposals either in numerical (tabular) form, or using chat messages followed by exchange of numerical proposals. Numerical communication significantly increases trusting and trustworthiness; inclusion of 1-min verbal communication in a chat room generates an even larger and more robust effect. On average, trustors send $9.21 of their $10 endowment as compared to $7.66 in the standard trust game, and trustees return 56% vs. 45%. Chat enhances the likelihood that trustors and trustees will adhere to non-binding agreements they make--an additional interpretation of trusting and trustworthiness--and increases the probability that subjects will propose, accept, and abide by equal-division agreements. Analysis of the content of subjects' verbal communication shows that what is said, and not only the fact that things are said, significantly affects outcomes.

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Article provided by Elsevier in its journal Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics).

Volume (Year): 40 (2011)
Issue (Month): 1 (February)
Pages: 1-13

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Handle: RePEc:eee:soceco:v:40:y:2011:i:1:p:1-13
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/620175

Keywords: Trust game Trust Trustworthiness Reciprocity Commitment Communication Cheap talk;

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Cited by:

  1. Schniter, Eric & Sheremeta, Roman, 2014. "Predictable and Predictive Emotions: Explaining Cheap Signals and Trust Re-Extension," MPRA Paper 59665, University Library of Munich, Germany.
  2. Khalmetski, Kiryl, 2016. "Testing guilt aversion with an exogenous shift in beliefs," Games and Economic Behavior, Elsevier, vol. 97(C), pages 110-119.
  3. Philipp Doerrenberg & Jan Schmitz, 2017. "Tax compliance and information provision. A field experiment with small firms," Journal of Behavioral Economics for Policy, Society for the Advancement of Behavioral Economics (SABE), vol. 1(1), pages 47-54, February.
  4. Giovanni Di Bartolomeo & Stefano Papa, 2016. "Some Determinants of Trust Formation and Pro-social Behaviours in Investment Games: An Experimental Study," Studies in Microeconomics, , vol. 4(1), pages 13-26, June.
  5. repec:spr:jeicoo:v:12:y:2017:i:3:d:10.1007_s11403-016-0177-9 is not listed on IDEAS
  6. Adam Zylbersztejn, 2014. "Non-verbal feedback, strategic signaling and non- monetary sanctioning: new experimental evidence from a public goods game," Working Papers halshs-01098775, HAL.
  7. Zylbersztejn, Adam, 2014. "Strategic signaling or emotional sanctioning? An experimental study of ex post communication in a repeated public goods game," Department of Economics Working Paper Series 4075, WU Vienna University of Economics and Business.
  8. repec:beh:jbep11:v:1:y:2017:i:1:p:61-68 is not listed on IDEAS
  9. Lei, Vivian & Masclet, David & Vesely, Filip, 2014. "Competition vs. communication: An experimental study on restoring trust," Journal of Economic Behavior & Organization, Elsevier, vol. 108(C), pages 94-107.
  10. Feltovich, Nick & Grossman, Philip J., 2015. "How does the effect of pre-play suggestions vary with group size? Experimental evidence from a threshold public-good game," European Economic Review, Elsevier, vol. 79(C), pages 263-280.
  11. Adam Zylbersztejn, 2014. "The predominant role of signal precision in experimental beauty contests," Working Papers 1443, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure.

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