Words speak louder than money

Maroš Servátka; Steven Tucker; Radovan Vadovič

doi:10.1016/j.joep.2011.04.003

Words speak louder than money

Maroš Servátka^*, Steven Tucker, Radovan Vadovič

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

20 Citations (Scopus)

Abstract

Should one use words or money to foster trust of the other party if no means of enforcing trustworthiness are available? This paper reports an experiment studying the effectiveness of two types of mechanisms for promoting trust: a costly gift and a costless message as well as their mutual interaction. We nest our findings in the standard version of the investment game. Our data provide evidence that while both stand-alone mechanisms enhance trust, a gift performs significantly worse than a message. Moreover, when a gift is combined with sending a message, it can be counterproductive.

Original language	English
Pages (from-to)	700-709
Number of pages	10
Journal	Journal of Economic Psychology
Volume	32
Issue number	5
DOIs	https://doi.org/10.1016/j.joep.2011.04.003
Publication status	Published - Oct 2011
Externally published	Yes

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10.1016/j.joep.2011.04.003

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Words speak louder than money

Abstract

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