Incomplete Information Strengthens the Effectiveness of Social Approval

17 Pages Posted: 21 Nov 2014

See all articles by Matthias Greiff

Matthias Greiff

Clausthal University of Technology - Department of Economics and Business Administration

Fabian Paetzel

University of the German Federal Armed Forces - Helmut Schmidt Universität; DFG Research Group 2104

Date Written: January 2015

Abstract

We present a theoretical model of a public good game in which the expression of social approval induces pro-social behavior. Using a laboratory experiment with earned heterogeneous endowments, we test our model. The main hypothesis is that the expression of social approval increases cooperative behavior even if reputation building is impossible. We vary the information available and investigate how this affects the expression of social approval and individual contributions. The expression of social approval significantly increases contributions. However, the increase is smaller if additional information is provided, suggesting that social approval is more effective if subjects receive a noisy signal about others’ contributions.

JEL Classification: C72, C91, D71, D83

Suggested Citation

Greiff, Matthias and Paetzel, Fabian, Incomplete Information Strengthens the Effectiveness of Social Approval (January 2015). Economic Inquiry, Vol. 53, Issue 1, pp. 557-573, 2015, Available at SSRN: https://ssrn.com/abstract=2528845 or http://dx.doi.org/10.1111/ecin.12134

Matthias Greiff (Contact Author)

Clausthal University of Technology - Department of Economics and Business Administration ( email )

Julius-Albert-Str. 2
Clausthal-Zellerfeld D-38678
Germany

Fabian Paetzel

University of the German Federal Armed Forces - Helmut Schmidt Universität ( email )

Holstenhofweg 85
Hamburg, 22008
Germany

DFG Research Group 2104 ( email )

Holstenhofweg 85
Hamburg, DE 22043
Germany

HOME PAGE: http://bedarfsgerechtigkeit.hsu-hh.de/en?set_language=en

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