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Can Observers Predict Trustworthiness?

Michèle Belot; V. Bhaskar1,2; Jeroen van de Ven

1 UCL Australia · 2 University College London

The Review of Economics and Statistics 2012 open access

We investigate whether experimental subjects can predict behavior in a prisoner's dilemma played on a TV show. Subjects report probabilistic beliefs that a player cooperates, before and after the players communicate. Subjects correctly predict that women and players who make a voluntary promise are more likely to cooperate. They are able to distinguish truth from lies when a player is asked about her intentions by the host. Subjects are to some extent able to predict behavior; their beliefs are 7~percentage points higher for cooperators than for defectors. We also study their Bayesian updating. Beliefs do not satisfy the martingale property and display mean reversion.

DOI
10.1162/rest_a_00146
Volume
94 (1)
Pages
246-259
Language
en
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