In a Transparent Gov We Trust

33 Pages Posted: 7 Dec 2021

See all articles by Natalia Borzino

Natalia Borzino

ETH Zürich

Enrique Fatas

University of Pennsylvania - School of Arts & Sciences; Universidad ICESI

Emmanuel Peterle

Université de Rennes 1

Date Written: October 2021

Abstract

We transparency and reputation in a stylized investment game in which two senders interact with
a receiver in a linear network. We analyze how ex-ante information (compatible with receiver’s
reputation building) and ex-post information (making the receiver’s decision transparent) make
senders and receivers comply with an exogenous, fair and non-binding rule. In the reputation
treatment, senders know the average amount returned by the receiver to both senders in the previous period. In the transparency treatment, senders are aware of the amount received back by the other sender in the network. Relative to a baseline treatment in which senders are only informed about their own actions and outcomes, ex-ante and ex-post information disclosure have very differently effects on trust. While reputation helps some receivers, aggregate trust does not significantly change in the reputation condition. Transparency generates a large and significant increase in trust (amounts sent are 27% above the ones chosen in reputation), being the effect largely driven by a sustained and large reduction of senders choosing not to trust at all (56% less in transparency than in reputation in the second half of the experiment). Across all treatments and roles, the non-binding rule significantly and positively shapes individual decisions.

Keywords: Information disclosure, Transparency, Reputation, Voluntary Compliance, Trust, Networks, Investment game

JEL Classification: C72, C91, D03

Suggested Citation

Borzino, Natalia and Fatas, Enrique and Peterle, Emmanuel, In a Transparent Gov We Trust (October 2021). Available at SSRN: https://ssrn.com/abstract=3978808 or http://dx.doi.org/10.2139/ssrn.3978808

Natalia Borzino

ETH Zürich ( email )

Zürichbergstrasse 18
8092 Zurich, CH-1015
Switzerland

Enrique Fatas (Contact Author)

University of Pennsylvania - School of Arts & Sciences ( email )

Philadelphia, PA 19104
United States

Universidad ICESI ( email )

Calle 18 #122-135
A.A. 25608
Cali
Colombia

Emmanuel Peterle

Université de Rennes 1 ( email )

11 Rue Jean Macé
Rennes, Rennes 35700
France

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