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Title:Incentive design and trust: comparing the effects of tournament and team-based incentives on trust PDF Logo
Authors:Oxoby, Robert J.
Friedrich, Colette
Issue Date:2008
Series/Report no.:IZA Discussion Papers 3424
Abstract:We explore the extent to which the structure of incentives affects trust. We hypothesize that the degree to which different incentive mechanisms emphasize competition (via the perceived intentions of others) and entitlements (via the perceived property rights) will affect individuals' subsequent behavior. In our experiment, bargaining pairs earned endowments through either tournaments or team-based incentives. Participants engaged in a subsequent trust game in which the sender had access to the total endowment generated by the pair. We find that the structure of the incentive mechanisms has asymmetric effects on observed trust in which participants' relative performance framed trusting behavior.
Subjects:Trust
incentives
experiments
tournaments
JEL:J31
Persistent Identifier of the first edition:urn:nbn:de:101:1-2008040197
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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