The role of communication content and reputation in the choice of transaction partners: A study based on field and laboratory data

Brosig-Koch, J.; Heinrich, T.

Abstract

We study the effects of communication content and its interaction with reputation on the choice of transaction partners in markets with moral hazard. We find that buyers' choices of sellers are influenced by prices and reputation information as well as by sellers' messages: buyers prefer sellers who make specific promises. If specific promises are infeasible, buyers prefer sellers whose arguments reduce the social distance. These observations do not depend on the availability of reputation information. We also find that, if specific promises are feasible, buyers' profits do not significantly differ from hypothetical profits realized under a correct expectations rule.

Citation

Brosig-Koch, J., & Heinrich, T. (2018). The role of communication content and reputation in the choice of transaction partners: A study based on field and laboratory data. Games and Economic Behavior, 112, 49-66. https://doi.org/10.1016/j.geb.2018.07.004

• Journal Article Type: Article
• Acceptance Date: Jul 13, 2018
• Online Publication Date: Jul 31, 2018
• Publication Date: Nov 1, 2018
• Deposit Date: Jul 17, 2018
• Publicly Available Date: Jan 31, 2020
• Journal: Games and Economic Behavior
• Print ISSN: 0899-8256
• Electronic ISSN: 1090-2473
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 112
• Pages: 49-66
• DOI: https://doi.org/10.1016/j.geb.2018.07.004
• Public URL: https://durham-repository.worktribe.com/output/1320623