Investment Choice Architecture in Trust Games: When “All-in” Is Not Enough

Authors

Joaquin Gómez-Miñambres, Chapman UniversityFollow
Eric Schniter, Chapman UniversityFollow
Timothy W. Shields, Chapman UniversityFollow

Document Type

Article

Publication Date

10-2019

Abstract

While many economic interactions feature “All-or-Nothing” options nudging investors towards going “all-in”, such designs may unintentionally affect reciprocity. We manipulate the investor’s action space in two versions of the “trust game”. In one version investors can invest either “all” their endowment or “nothing”. In the other version, they can invest any amount of the endowment. Consistent with our intentions-based model, we show that "all-or-nothing” designs coax more investment but limit investors’ demonstrability of intended trust. As a result, “all-in” investors are less generously reciprocated than when they can invest any amount, where full investments are a clearer signal of trustworthiness.

Comments

ESI Working Paper 19-24

A peer-reviewed version of this paper was later published in:

Recommended Citation

Gómez-Miñambres, J., Schniter, E., & Shields, T. W. (2019). Investment choice architecture in trust games: When “all-in” is not enough. ESI Working Paper 19-24. Retrieved from https://digitalcommons.chapman.edu/esi_working_papers/284/