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- Title
INVESTMENT CHOICE ARCHITECTURE IN TRUST GAMES: WHEN "ALL‐IN" IS NOT ENOUGH.
- Authors
Gómez‐Miñambres, Joaquín; Schniter, Eric; Shields, Timothy W.
- Abstract
While many economic interactions feature "All‐or‐Nothing" options nudging investors towards going "all‐in," such designs may unintentionally affect reciprocity. We manipulate the investor's action space in two versions of the "trust game." In one version investors can invest either "all" their endowment or "nothing." In the other version, they can invest any amount of the endowment. Consistent with our intentions‐based model, we show that "all‐or‐nothing" designs coax more investment but limit investors' demonstrability of intended trust. As a result, "all‐in" investors are less generously reciprocated than when they can invest any amount, where full investments are a clearer signal of trustworthiness.
- Subjects
INVESTMENTS; ARCHITECTURE; GAMES; INVESTORS; ENDOWMENTS; RECIPROCITY (Commerce)
- Publication
Economic Inquiry, 2021, Vol 59, Issue 1, p300
- ISSN
0095-2583
- Publication type
Article
- DOI
10.1111/ecin.12939