Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/86770 
Year of Publication: 
2009
Series/Report no.: 
Tinbergen Institute Discussion Paper No. 09-030/1
Publisher: 
Tinbergen Institute, Amsterdam and Rotterdam
Abstract: 
We consider repeated trust game experiments to study the interplay between explicit and relational incentives. After having gained experience with two payoff variations of the trust game, subjects in the final part explicitly choose which of these two variants to play. Theory predicts that subjects will choose the payoff dominated game (representing a bad explicit contract), because this game better sustains (implicit) relational incentives backed by either reputational or reciprocity considerations. We also explicitly test how game choice is affected by the length of the repeated game.
Subjects: 
relational contracts
explicit incentives
crowding out
experiments
JEL: 
C91
M52
J41
Document Type: 
Working Paper

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