Trust and reputation under asymmetric information

We study the role of information about multiplier in a finitely repeated investment game. A high increases reputational incentives trustee, leading to more repayments. Our perfect Bayesian equilibrium analysis shows that if trustee is privately informed multiplier, both expected frequency investments and repayments as well payoffs players are higher compared situation where public knowledge. test this result laboratory experiment. The data cannot confirm predicted welfare dominance private multiplier. discuss potential reasons for deviation between theory experimental data.