Abstract
This paper examined the impact of the consensus-making mechanism, where members reach a common decision via an intra-group discussion, on intergroup trust and reciprocity in a strategic setting. Data from a laboratory trust game with salient financial incentives generated the following results. First, compared to individual decision-makers, consensus groups exhibited a) lower psychological trust, b) higher behavioral trust, after controlling for psychological trust, and c) lower reciprocity. Second, compared to decisions made by autonomous group representatives, who are given the responsibility of unilaterally making a decision for his/her group, group consensus decisions were more trusting but less reciprocating. Thus, the specific decision-making mechanism adopted by groups in a strategic interaction may profoundly change the nature and the interplay of the interaction. Lastly, results show that trusting behavior is driven by reciprocity expectations, while reciprocating behavior is not sensitive to the first mover's behavior, i.e., the level of trust experienced.
Published Version
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