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Trust and Communication in a Property Rights Dilemma

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  • T.K Ahn
  • Loukas Balafoutas
  • Mongoljin Batsaikhan
  • Francisco Campos Ortiz
  • Louis Putterman
  • Matthias Sutter

Abstract

We study a laboratory social dilemma game in which incentives to steal from others lead to the socially inefficient diversion of resources from production unless the members of a given minisociety can abide by norms of non-theft or engage in low cost collective protection of their members’ wealth accumulations. We compare two treatments in which subjects have opportunities to exchange free-form messages to one without such opportunities, finding that most subjects allocate far less to theft and most groups achieve much greater efficiency in the presence of communication. Ease of identifying who has engaged in theft varies across the two communication treatments, but is of minor importance to the outcome. We find several coding-amenable elements of message content to be statistically significant predictors of group and individual outcomes.

Suggested Citation

  • T.K Ahn & Loukas Balafoutas & Mongoljin Batsaikhan & Francisco Campos Ortiz & Louis Putterman & Matthias Sutter, 2016. "Trust and Communication in a Property Rights Dilemma," Working Papers 2016-5, Brown University, Department of Economics.
  • Handle: RePEc:bro:econwp:2016-5
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • P14 - Economic Systems - - Capitalist Systems - - - Property Rights

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