Trustors' disregard for trustees deciding quickly or slowly in three experiments with time constraints.

Many decisions in the economic and social domain are made under time constraints, be it under time pressure or forced delay. Requiring individuals to decide quickly or slowly often elicit different responses. Time pressure has been associated with inefficiency in market settings and market regulation often requires individuals to delay their decisions via cooling-off periods. Yet, recent research suggests that people who make reflective decisions are met with distrust. If this extends to external time constraints, then forcing individuals to delay their decisions may be counterproductive in scenarios where trust considerations are important, such as in market and organizational design. In three Trust Game experiments (total number of participants = 1872), including within- and between-subjects designs, we test whether individuals trust (more) someone who is forced to respond quickly (intuitively) or slowly (reflectively). We find that trustors do not adjust their behavior (or their beliefs) to the trustee's time conditions. This seems to be an appropriate response because time constraints do not affect trustees' behavior, at least when the game decisions are binary (trust vs. don't trust; reciprocate vs. don't reciprocate) and therefore mistakes cannot explain choices. Thus, delayed decisions per se do not seem to elicit distrust.

Multiple Openings and Competitiveness of Forward Markets: Experimental Evidence.

We test the competition enhancing effect of selling forward in experimental Cournot duopoly and quadropoly with multiple forward markets. We find that two forward periods yields competitive outcomes and that the results are very close to the predicted theoretical results for quantity setting duopolies and quadropolies. Our experiments lend strong support to the hypothesis that forward markets are competition enhancing. We then test a new market that allows for endogenously determined indefinitely many forward periods that only close when sellers coordinate on selling a zero amount in a forward market. We find that the outcomes under an endogenous close rule are also very competitive. These results hold for both duopolies and quadropolies.

Information asymmetry and deception.

Situations such as an entrepreneur overstating a project's value, or a superior choosing to under or overstate the gains from a project to a subordinate are common and may result in acts of deception. In this paper we modify the standard investment game in the economics literature to study the nature of deception. In this game a trustor (investor) can send a given amount of money to a trustee (or investee). The amount received is multiplied by a certain amount, k, and the investee then decides on how to divide the total amount received. In our modified game the information on the multiplier, k, is known only to the investee and she can send a non-binding message to the investor regarding its value. We find that 66% of the investees send false messages with both under and over, statement being observed. Investors are naive and almost half of them believe the message received. We find greater lying when the distribution of the multiplier is unknown by the investors than when they know the distribution. Further, messages make beliefs about the multiplier more pessimistic when the investors know the distribution of the multiplier, while the opposite is true when they do not know the distribution.