Digital Communication and Swift Trust
GATE Lyon Saint-Etienne, WP 1909 – February, 2019
Posted: 12 Mar 2019
Date Written: February 26, 2019
We experimentally study the effect of the mode of digital communication on the emergence of swift trust in a principal-agent relationship. We consider three modes of communication: plain text, audio, and video. Communication is pre-play, one-way, and unrestricted, but its content is homogenized across treatments. Overall, both audio and video messages have a positive (and similar) effect on trust compared to plain text; however, the magnitude of these effects depends on the content of agent’s message (promise to act trustworthily vs. no such promise). In all conditions, we observe a positive effect of the agent’s promise on the principal’s trust. We also find that providing visual cues about the sender promotes trust and helps overcome gender favoritism in females.
Keywords: Digital Communication, Trust, Hidden Action, Principal-Agent Relationship, Promise
JEL Classification: C72, D83
Suggested Citation: Suggested Citation