Less Sensitive Reputation Spurs Cooperation: An Experiment on Noisy Reputation Systems

11 Pages Posted: 3 Aug 2016

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: August 2, 2016

Abstract

Using a repeated public good game with stranger matching, we compare how two different reputation systems with endogenous evaluations affect rates of cooperation. Contributions are public information and each participant evaluates her partner’s contribution. At the beginning of each period, participants receive information about the partner’s evaluation in previous periods. There are two information treatments: Each participant receives information either about her own and her partner’s most recent evaluation, or about her own and her partner’s average evaluation. Results show that with average evaluations reputation is less sensitive, incentives for reputation building are stronger and contributions are higher.

Keywords: Conditional cooperation, Endogenous evaluations, Noisy reputation, Informativeness

JEL Classification: C72, C91, D03, D83

Suggested Citation

Greiff, Matthias and Paetzel, Fabian, Less Sensitive Reputation Spurs Cooperation: An Experiment on Noisy Reputation Systems (August 2, 2016). Available at SSRN: https://ssrn.com/abstract=2817296 or http://dx.doi.org/10.2139/ssrn.2817296

Matthias Greiff

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

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

Fabian Paetzel (Contact Author)

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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