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Cagala, Tobias; Glogowsky, Ulrich; Grimm, Veronika; Rincke, Johannes
(2015):
Cooperation and Trustworthiness in Repeated Interaction.
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![[img]](https://epub.ub.uni-muenchen.de/27513/1.hassmallThumbnailVersion/Cagala_Glogowsky_Grimm_Rincke_Coop_and_Trust_2015-02.pdf)  Vorschau |
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Abstract
Public goods provision often involves groups of contributors repeatedly interacting with administrators who can extract rents from the pool of contributions. We suggest a novel identification approach that exploits the sequential ordering of decisions in a panel vector autoregressive model to study social interactions in the laboratory. Despite rent extraction, contributors and administrators establish a stable interaction with cooperation matching the level from a comparable Public Goods Game. In the short run, temporary changes in behavior trigger substantial behavioral multiplier effects. We demonstrate that cooperation breeds trustworthiness and vice versa and that one-time disruptions are particularly damaging in settings with a lack of cooperative attitudes and trust.
