Trust and Communication in a Property Rights Dilemma

33 Pages Posted: 16 Jul 2016

See all articles by T. K. Ahn

T. K. Ahn

Seoul National University - Department of Political Science and International Relations

Loukas Balafoutas

University of Innsbruck

Mongoljin Batsaikhan

Georgetown University - Edmund A. Walsh School of Foreign Service (SFS)

Francisco Campos-Ortiz

Bank of Mexico - Economic Research Department

Louis Putterman

Brown University - Department of Economics

Matthias Sutter

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods; University of Cologne - Department of Economics

Date Written: June 30, 2016

Abstract

We study a laboratory social dilemma game in which incentives to steal from others lead to the socially inefficient diversion of resources from production unless the members of a given mini-society can abide by norms of non-theft or engage in low cost collective protection of their members’ wealth accumulations. We compare two treatments in which subjects have opportunities to exchange free-form messages to one without such opportunities, finding that most subjects allocate far less to theft and most groups achieve much greater efficiency in the presence of communication. Ease of identifying who has engaged in theft varies across the two communication treatments, but is of minor importance to the outcome. We find several coding-amenable elements of message content to be statistically significant predictors of group and individual outcomes.

Keywords: property rights, theft, efficiency, experiment, communication

JEL Classification: C91, C92, D03, H41, P14

Suggested Citation

Ahn, T. K. and Balafoutas, Loukas and Batsaikhan, Mongoljin and Campos-Ortiz, Francisco and Putterman, Louis G. and Sutter, Matthias, Trust and Communication in a Property Rights Dilemma (June 30, 2016). Available at SSRN: https://ssrn.com/abstract=2810270 or http://dx.doi.org/10.2139/ssrn.2810270

T. K. Ahn

Seoul National University - Department of Political Science and International Relations ( email )

Kwanak-gu
Seoul, 151-742
Korea, Republic of (South Korea)

Loukas Balafoutas

University of Innsbruck ( email )

Universitätsstraße 15
Innsbruck, Innsbruck 6020
Austria

Mongoljin Batsaikhan

Georgetown University - Edmund A. Walsh School of Foreign Service (SFS) ( email )

Washington, DC 20057
United States

Francisco Campos-Ortiz

Bank of Mexico - Economic Research Department ( email )

Av. 5 de Mayo 18
Piso 4
Mexico City, 06059
Mexico

Louis G. Putterman (Contact Author)

Brown University - Department of Economics ( email )

Box B
Providence, RI 02912
United States
401-863-3837 (Phone)
401-863-1970 (Fax)

Matthias Sutter

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods ( email )

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany

University of Cologne - Department of Economics

Cologne, 50923
Germany

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