Building trust-one gift at a time

Maroš Servátka*, Steven Tucker, Radovan Vadovič

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

4 Citations (Scopus)
37 Downloads (Pure)

Abstract

This paper reports an experiment evaluating the effect of gift giving on building trust. We have nested our explorations in the standard version of the investment game. Our gift treatment includes a dictator stage in which the trustee decides whether to give a gift to the trustor before both of them proceed to play the investment game. We observe that in such case the majority of trustees offer their endowment to trustors. Consequently, receiving a gift significantly increases the amounts sent by trustors when controlling for the differences in payoffs created by it. Trustees are, however, not better off by giving a gift as the increase in the amount sent by trustors is not large enough to offset the trustees' loss associated with the cost of giving a gift.

Original languageEnglish
Pages (from-to)412-433
Number of pages22
JournalGames
Volume2
Issue number4
DOIs
Publication statusPublished - Dec 2011
Externally publishedYes

Bibliographical note

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