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Trusting Behavior in a Repeated Investment Game

Listed author(s):
  • François Cochard

    ()

    (CRESE - Centre de REcherches sur les Stratégies Economiques - UFC - UFC - Université de Franche-Comté)

  • Phu Nguyen Van

    (BETA - Bureau d'Economie Théorique et Appliquée - CNRS - Centre National de la Recherche Scientifique - UL - Université de Lorraine - Université de Strasbourg)

  • Marc Willinger

    (LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - UM3 - Université Paul-Valéry - Montpellier 3 - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques - INRA Montpellier - Institut national de la recherche agronomique [Montpellier] - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique)

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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Paper provided by HAL in its series Post-Print with number hal-00459746.

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Length:
Date of creation: 2004
Publication status: Published in Journal of Economic Behavior and Organization, Elsevier, 2004, 55, pp.31-44. <10.1016/j.jebo.2003.07.004>
Handle: RePEc:hal:journl:hal-00459746
DOI: 10.1016/j.jebo.2003.07.004
Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-00459746
Contact details of provider: Web page: https://hal.archives-ouvertes.fr/

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  1. Edward L. Glaeser & David I. Laibson & José A. Scheinkman & Christine L. Soutter, 2000. "Measuring Trust," The Quarterly Journal of Economics, Oxford University Press, vol. 115(3), pages 811-846.
    • Glaeser, Edward Ludwig & Laibson, David I. & Scheinkman, Jose A. & Soutter, Christine L., 2000. "Measuring Trust," Scholarly Articles 4481497, Harvard University Department of Economics.
  2. Gneezy, Uri & Guth, Werner & Verboven, Frank, 2000. "Presents or investments? An experimental analysis," Journal of Economic Psychology, Elsevier, vol. 21(5), pages 481-493, October.
  3. Camerer, Colin & Weigelt, Keith, 1988. "Experimental Tests of a Sequential Equilibrium Reputation Model," Econometrica, Econometric Society, vol. 56(1), pages 1-36, January.
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  5. Andreas Ortmann & John Fitzgerald & Carl Boeing, 2000. "Trust, Reciprocity, and Social History: A Re-examination," Experimental Economics, Springer;Economic Science Association, vol. 3(1), pages 81-100, June.
  6. Stephen Knack & Philip Keefer, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1251-1288.
  7. Anderhub, Vital & Engelmann, Dirk & Guth, Werner, 2002. "An experimental study of the repeated trust game with incomplete information," Journal of Economic Behavior & Organization, Elsevier, vol. 48(2), pages 197-216, June.
  8. G. S. Maddala, 1987. "Limited Dependent Variable Models Using Panel Data," Journal of Human Resources, University of Wisconsin Press, vol. 22(3), pages 307-338.
  9. Fehr, Ernst & Gachter, Simon, 1998. "Reciprocity and economics: The economic implications of Homo Reciprocans1," European Economic Review, Elsevier, vol. 42(3-5), pages 845-859, May.
  10. repec:hrv:faseco:30726298 is not listed on IDEAS
  11. Brandts, Jordi & Figueras, Neus, 2003. "An exploration of reputation formation in experimental games," Journal of Economic Behavior & Organization, Elsevier, vol. 50(1), pages 89-115, January.
  12. Kreps, David M. & Wilson, Robert, 1982. "Reputation and imperfect information," Journal of Economic Theory, Elsevier, vol. 27(2), pages 253-279, August.
  13. Neral, John & Ochs, Jack, 1992. "The Sequential Equilibrium Theory of Reputation Building: A Further Test," Econometrica, Econometric Society, vol. 60(5), pages 1151-1169, September.
  14. Guth, Werner & Ockenfels, Peter & Wendel, Markus, 1997. "Cooperation based on trust. An experimental investigation," Journal of Economic Psychology, Elsevier, vol. 18(1), pages 15-43, February.
  15. Berg Joyce & Dickhaut John & McCabe Kevin, 1995. "Trust, Reciprocity, and Social History," Games and Economic Behavior, Elsevier, vol. 10(1), pages 122-142, July.
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