Trust and financial trades : lessons from an investment game wher reciprocators can hide behind probabilities - Archive ouverte HAL Access content directly
Other Publications Year : 2011

Trust and financial trades : lessons from an investment game wher reciprocators can hide behind probabilities

(1) , (2) , (3)
1
2
3

Abstract

This paper shows that if a very small, exogenously given probability of terminating the exchange is introduced in an elementary investment game, more reciprocators will choose the defection strategy. Everything happens as if they "hide behind probabilities" in order to break the trust relationship. Investors do not alter their behavior in a significant way, at least not for a very small external risk. Financial assets all come with a predetermined and contractual probability that by the time when the buyer has to receive the reward for his investment, "bad luck" might have brought the asset value down to zero. In the light of the experimental findings, such trades would not provide a favorable environment for building trust.
Fichier principal
Vignette du fichier
DR10007.pdf (893.76 Ko) Télécharger le fichier
Origin : Files produced by the author(s)
Loading...

Dates and versions

hal-00572384 , version 1 (01-03-2011)
hal-00572384 , version 2 (25-10-2011)
hal-00572384 , version 3 (06-03-2012)

Identifiers

  • HAL Id : hal-00572384 , version 3

Cite

Radu Vranceanu, Angela Sutan, Delphine Dubart. Trust and financial trades : lessons from an investment game wher reciprocators can hide behind probabilities. 2011, 23 p. ⟨hal-00572384v3⟩

Collections

ESSEC
373 View
491 Download

Share

Gmail Facebook Twitter LinkedIn More