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Partnership and trust in gift-exchange games

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  • Benoît Chalvignac

Abstract

In this paper we extend the gift-exchange game setting to include a new experimental treatment where subjects are paired with the same partner for the whole game. We observe that the matching mode is more critical to cooperation levels than the contractual arrangement, and that trust-based contracts outperform incentive-based contracts when interaction is repeated within the same pair. In the partner setting, individual preferences seem only to be second-order determinants of cooperation levels and most subjects are highly responsive to others' cooperative choices. Our findings help explain the cooperation dynamics required for organizations to leverage their incentive structure and to endure.

Suggested Citation

  • Benoît Chalvignac, 2013. "Partnership and trust in gift-exchange games," Working Papers of BETA 2013-18, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    • Handle: RePEc:ulp:sbbeta:2013-18
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    File URL: http://beta.u-strasbg.fr/WP/2013/2013-18.pdf
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    More about this item

    Keywords

    Gift-exchange game; Trust; Cooperation; Informal organization.;
    All these keywords.

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics

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