'Confidentially Yours': Restricting Information Flow between Trustees Enhances Trust-Dependent Transactions

39 Pages Posted: 2 Mar 2006

See all articles by Vincent Mak

Vincent Mak

University of Cambridge - Cambridge Judge Business School

Rami Zwick

University of California, Riverside

Date Written: November 29, 2006

Abstract

By extending the traditional trust game to settings involving more than one trustee, we study how restricting information flow between trustees influences trust and reciprocity. We start with a theoretical investigation and then report the results of two experiments designed to examine investor strategy and trustee behavior. Our results suggest that, compared with when information flow is unrestricted, restricting information flow between trustees leads to the following consequences: (a) total investment is larger, (b) the number of trustees receiving non-zero investment is about the same, and (c) the investor sends out a larger variety of invested amounts to different trustees.

Keywords: Trust, trust and reciprocity, information flow, trust game, multi-person game

JEL Classification: C72, C92, D63, Z13

Suggested Citation

Mak, Vincent and Zwick, Rami, 'Confidentially Yours': Restricting Information Flow between Trustees Enhances Trust-Dependent Transactions (November 29, 2006). Available at SSRN: https://ssrn.com/abstract=886644 or http://dx.doi.org/10.2139/ssrn.886644

Vincent Mak (Contact Author)

University of Cambridge - Cambridge Judge Business School ( email )

Trumpington Street
Cambridge, CB2 1AG
United Kingdom
+44 (0)1223 764295 (Phone)
+44 (0)1223 339701 (Fax)

Rami Zwick

University of California, Riverside ( email )

900 University Avenue
Riverside, CA 92521
United States

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