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James C Cox and Danyang Li
''Do I care if you know I betrayed you?''
( 2012, Vol. 32 No.4 )
In this paper, we report results derived from a laboratory experiment based on a modifed trust game. We introduced a coin flip between decisions of trustors and trustees in the trust game. The realized outcome of the coin flip determines the productivity of trust. By varying trustors' ability to observe the outcome of the coin flip, we allow the trustees to be able to hide betrayal "behind a coin flip." We find that more trustees choose to defect when betrayal is obfuscated than when it is revealed. Our result suggests that subjects who choose to repay trust may just pretend to be cooperative, but do not really value the outcome of cooperation.
Keywords: Experiments; Betrayal Cost; Trust; Cooperation
JEL: C9 - Design of Experiments: General
Manuscript Received : Aug 20 2012 Manuscript Accepted : Oct 09 2012

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