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Competition vs. communication: An experimental study on restoring trust

Listed author(s):
  • Vivian Lei

    (Department of Economics - University of Wisconsin-Milwaukee)

  • David Masclet

    (CIRANO - Centre interuniversitaire de recherche en analyse des organisations - UQAM - Université du Québec à Montréal , CREM - Centre de Recherche en Economie et Management - UNICAEN - Université Caen Normandie - UR1 - Université de Rennes 1 - CNRS - Centre National de la Recherche Scientifique)

  • Filip Vesely

    (Department of Economics - University of Wisconsin-Milwaukee)

Trust is fragile. It is hard to build but easy to destroy. In this paper, we explore the fragility of trust in a stylized laboratory environment. We ask whether transgression outside a direct send-and-return relationship destroys trust and, if so, whether a competition against outsiders or an apology for misdeeds helps restore it. We find that transgression significantly reduces trust and that the broken trust can be greatly restored by group competition. Communication via an apology, impersonal or not, has an insignificant impact. By contrast, offering explanations for misbehavior is as effective as group competition.

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File URL: https://halshs.archives-ouvertes.fr/halshs-01074083/document
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Paper provided by HAL in its series Post-Print with number halshs-01074083.

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Date of creation: Dec 2014
Publication status: Published in Journal of Economic Behavior and Organization, Elsevier, 2014, 108, pp.94-107. <10.1016/j.jebo.2014.09.001>
Handle: RePEc:hal:journl:halshs-01074083
DOI: 10.1016/j.jebo.2014.09.001
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01074083
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