Trust and Reputation under Asymmetric Information

Konferenzbeitrag

We study the role of information about the multiplier in a finitely repeated investment game. A high multiplier increases the reputational incentives of a trustee, leading to more repayments. Our perfect Bayesian equilibrium analysis shows that if the trustee is privately informed about the multiplier, both the expected frequency of investments and repayments as well as the expected payoffs of both players are higher compared to a situation where the multiplier is public knowledge. We test this result in a laboratory experiment. The data cannot confirm the predicted welfare dominance of private information about the multiplier. We discuss potential reasons for the deviation between theory and experimental data.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Beiträge zur Jahrestagung des Vereins für Socialpolitik 2020: Gender Economics

Classification and Topics

• Classification: Wirtschaft ; Stochastic and Dynamic Games; Evolutionary Games; Repeated Games ; Design of Experiments: Laboratory, Group Behavior ; Asymmetric and Private Information; Mechanism Design ; Search; Learning; Information and Knowledge; Communication; Belief; Unawareness ; New Firms; Startups
• Subject: reputation ; trust ; incomplete information ; experiment

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Janas, Moritz ; Oljemark, Emilia
• Event: Veröffentlichung
• (who): ZBW - Leibniz Information Centre for Economics
• (where): Kiel, Hamburg
• (when): 2020

Further information

• Handle: http://hdl.handle.net/10419/224518
• Last update: 10.03.2025, 11:45 AM CET