Article ID Journal Published Year Pages File Type
7243377 Journal of Economic Behavior & Organization 2014 11 Pages PDF
Abstract
We present a lab experiment on an endogenous trust game in which one player (the principal) may decide to leave the investment choice to the agent or to take the investment decision himself/herself. In the latter case we refer to this as “voluntary leadership”. We show that voluntary leadership increases investment and increases backtransfer of the second mover compared to the alternative sequencing in which the agent is investor. We also show that investment and backtransfer are higher under voluntary leadership than in the control treatment with exogenously determined sequencing. Furthermore, we show that risk preference and inequality aversion as modeled formally by Fehr and Schmidt (1999) influence behavior in the endogenous trust game.
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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