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Publisher DOI: 10.1016/j.geb.2018.07.004
Title: The role of communication content and reputation in the choice of transaction partners : a study based on field and laboratory data
Language: English
Authors: Brosig-Koch, Jeannette 
Heinrich, Timo  
Keywords: Communication; Moral hazard; Procurement auctions; Promises; Reputation; Social distance
Issue Date: 31-Jul-2018
Publisher: Elsevier
Source: Games and Economic Behavior 112: 49-66 (2018-11)
Abstract (english): 
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.
DOI: 10.15480/882.4663
ISSN: 1090-2473
Journal: Games and economic behavior 
Document Type: Article
License: CC BY-NC-ND 4.0 (Attribution-NonCommercial-NoDerivatives) CC BY-NC-ND 4.0 (Attribution-NonCommercial-NoDerivatives)
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