Lavish returns on cheap talk: Two-way communication in trust games

Avner Ben-Ner, Louis Putterman, Ting Ren

Research output: Contribution to journalArticlepeer-review

24 Scopus citations

Abstract

We conduct trust game experiments in which subjects can sometimes exchange proposals either in numerical (tabular) form, or using chat messages followed by exchange of numerical proposals. Numerical communication significantly increases trusting and trustworthiness; inclusion of 1-min verbal communication in a chat room generates an even larger and more robust effect. On average, trustors send $9.21 of their $10 endowment as compared to $7.66 in the standard trust game, and trustees return 56% vs. 45%. Chat enhances the likelihood that trustors and trustees will adhere to non-binding agreements they make-an additional interpretation of trusting and trustworthiness-and increases the probability that subjects will propose, accept, and abide by equal-division agreements. Analysis of the content of subjects' verbal communication shows that what is said, and not only the fact that things are said, significantly affects outcomes.

Original languageEnglish (US)
Pages (from-to)1-13
Number of pages13
JournalJournal of Socio-Economics
Volume40
Issue number1
DOIs
StatePublished - Feb 2011

Bibliographical note

Funding Information:
The research reported here was funded by a grant from the Russell Sage Foundation. We are indebted to the late John Dickhaut for early advice on our design, to Freyr Halldorsson for help in planning and carrying out the experiments and to Bruno Garcia for help in coding chat content. We thank Pedro dal Bó and Gary Charness for helpful comments. A longer version of this paper (including more detailed analyses of the data) is available in our working paper.

Keywords

  • Cheap talk
  • Commitment
  • Communication
  • Reciprocity
  • Trust
  • Trust game
  • Trustworthiness

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