IS REPUTATION A SUBSTITUTE FOR COMMITMENT IN THE PEASANT-DICTATOR GAME?

In this paper we use the experimental method to determine whether reputation is a substitute for commitment in the Peasant-Dictator game. Reputation is an imperfect substitute for commitment in the experiment. It is less efficient on average. Its effectiveness as a substitute declines as the return on investment declines. However, there are cohorts that converge to a convention exhibiting high levels of trust and trustworthiness in which behavior under reputation is indistinguishable from behavior under commitment.

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