Competition Fosters Trust
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Competition Fosters Trust. / Huck, Steffen; Lünser, Gabriele; Tyran, Jean-Robert Karl.
In: Games and Economic Behavior, Vol. 76, No. 1, 09.2012, p. 195-209.Research output: Contribution to journal › Journal article › Research › peer-review
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TY - JOUR
T1 - Competition Fosters Trust
AU - Huck, Steffen
AU - Lünser, Gabriele
AU - Tyran, Jean-Robert Karl
N1 - JEL Classification: C72; C92; D40; L14
PY - 2012/9
Y1 - 2012/9
N2 - We study the effects of reputation and competition in a trust game. If trustees are anonymous, outcomes are poor: trustees are not trustworthy, and trustors do not trust. If trustees are identifiable and can, hence, build a reputation, efficiency quadruples but is still at only a third of the first best. Adding more information by granting trustors access to all trustees' complete history has, somewhat surprisingly, no effect. On the other hand, we find that competition, coupled with some minimal information, eliminates the trust problem almost completely
AB - We study the effects of reputation and competition in a trust game. If trustees are anonymous, outcomes are poor: trustees are not trustworthy, and trustors do not trust. If trustees are identifiable and can, hence, build a reputation, efficiency quadruples but is still at only a third of the first best. Adding more information by granting trustors access to all trustees' complete history has, somewhat surprisingly, no effect. On the other hand, we find that competition, coupled with some minimal information, eliminates the trust problem almost completely
KW - Faculty of Social Sciences
KW - Competition
KW - Reputation
KW - Trust; Moral hazard
KW - Information conditions
U2 - 10.1016/j.geb.2012.06.010
DO - 10.1016/j.geb.2012.06.010
M3 - Journal article
VL - 76
SP - 195
EP - 209
JO - Games and Economic Behavior
JF - Games and Economic Behavior
SN - 0899-8256
IS - 1
ER -
ID: 43870538