The strategic communication of psychological similarity and its effect on economic partnership formation

Abstract

This paper investigates the strategic communication of psychological similarity and its effect on partnership formation. I experimentally test if and why individuals would use psychological similarity as a strategy and if it increases the likelihood of partnership formation. I hypothesise that the awareness of a psychological similarity creates a connection that motivates the individuals to display more trustworthy behaviour. I designed a trust game with hidden action to simulate a real-world partnership. The experiment employed 200 participants on MTURK and formed 100 randomized pairs. Results show that individuals are willing to use psychological similarity as strategy if they share a similarity with their partner (66%) but not willing to deceive at a small cost when they are different (4%). The individuals that chose to communicate similarity were more likely to show trustworthy behaviour, indicating that they do so in order to form a connection. Although not significant, results also show that individuals who are informed they share a psychological similarity with their partner are 10% more likely to engage in a partnership than individuals who are not informed.