Competition Fosters Trust

Research output: Contribution to journalJournal articlepeer-review

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
Original languageEnglish
JournalGames and Economic Behavior
Volume76
Issue number1
Pages (from-to)195-209
ISSN0899-8256
DOIs
Publication statusPublished - Sep 2012

ID: 43870538