Three-player trust game with insider communication

Sheremeta, RM; Zhang, J

Three-player trust game with insider communication

Sheremeta, RM Zhang, J

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Publication Type:: Journal Article
Citation:: Economic Inquiry, 2014, 52 (2), pp. 576 - 591
Issue Date:: 2014-04-01

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Field	Value	Language
dc.contributor.author	Sheremeta, RM	en_US
dc.contributor.author	Zhang, J https://orcid.org/0000-0003-3274-5245	en_US
dc.date.issued	2014-04-01	en_US
dc.identifier.citation	Economic Inquiry, 2014, 52 (2), pp. 576 - 591	en_US
dc.identifier.issn	0095-2583	en_US
dc.identifier.uri	http://hdl.handle.net/10453/115602
dc.description.abstract	We examine behavior in a three-player trust game in which the first player may invest in the second and the second may invest in the third. Any amount sent from one player to the next is tripled. The third player decides the final allocation among three players. The baseline treatment with no communication shows that the first and second players send significant amounts and the third player reciprocates. Allowing insider communication between the second and the third players increases cooperation between these two. Interestingly, there is an external effect of insider communication: the first player who is outside communication sends 54% more and receives 289% more than in the baseline treatment. As a result, insider communication increases efficiency from 44% to 68%. © 2013 Western Economic Association International.	en_US
dc.relation.ispartof	Economic Inquiry	en_US
dc.relation.isbasedon	10.1111/ecin.12018	en_US
dc.subject.classification	Economics	en_US
dc.title	Three-player trust game with insider communication	en_US
dc.type	Journal Article
utslib.citation.volume	2	en_US
utslib.citation.volume	52	en_US
utslib.for	1402 Applied Economics	en_US
utslib.for	1401 Economic Theory	en_US
utslib.for	14 Economics	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Economics Discipline
utslib.copyright.status	closed_access
pubs.issue	2	en_US
pubs.publication-status	Published	en_US
pubs.volume	52	en_US

Abstract:

We examine behavior in a three-player trust game in which the first player may invest in the second and the second may invest in the third. Any amount sent from one player to the next is tripled. The third player decides the final allocation among three players. The baseline treatment with no communication shows that the first and second players send significant amounts and the third player reciprocates. Allowing insider communication between the second and the third players increases cooperation between these two. Interestingly, there is an external effect of insider communication: the first player who is outside communication sends 54% more and receives 289% more than in the baseline treatment. As a result, insider communication increases efficiency from 44% to 68%. © 2013 Western Economic Association International.

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10453/115602