Does the trust game measure trust? (original) (raw)
Verified Trust: Reciprocity, Altruism, and Randomness in Trust Games
University of Lausanne Ecole des HEC …, 2005
Behavioral economists have come to recognize that reciprocity, the interaction of trust and trustworthiness, is a distinct and economically relevant component of individual preferences alongside selfishness and altruism. This recognition is principally due to observed decisions in laboratory “trust games”. However, recent research suggests that altruism may explain much of what “looks like” trust in such experiments. We formally derive discriminatory tests for altruism and trust based on within-treatment and within-subject comparisons, and we control for group attributes of experimental subjects. The central idea is to allow for rich and poor trustees, and to examine whether, consistent with dominant altruism, trustors give more to the poor, or whether, consistent with dominant reciprocity motives, trustors give no more to the poor than to the rich. Our results support trust as the dominant motivation for “trust like” decisions, with at most a subsidiary role for altruism.
Verified Trust: Reciprocity, Altruism and Noise in Trust Games
2004
Behavioral economists have come to recognize that reciprocity, the interaction of trust and trustworthiness, is a distinct and economically relevant component of individual preferences alongside selfishness and altruism. This recognition is principally due to observed decisions in experimental "trust games". However, recent research has cast doubt on the explanatory power of trust as a determinant of those decisions, suggesting that altruism may explain much of what "looks like" trust. Moreover, empirical tests for alternative behavioral determinants can be sensitive to experimental bias due to differences in protocols and framing. Therefore, we propose discriminatory tests for altruism and trust that can be based on within-treatment and within-subject comparisons, and we control for group attributes of experimental subjects. Our results support trust (i.e. expected reciprocation) as the dominant motivation for "trust like" decisions.
Does Trust Mean Giving and not Risking? Experimental Evidence from the Trust Game
Revue d'économie politique, 2015
In a within-subjects framework, we compare levels of transfer in the trust game and in the (triple) dictator game. We control preferences towards risk through the Holt and Laury test (2002) and social preferences with the ring test (Liebrand, 1984). We then provide evidence that social preferences correlate with levels of transfer, while risk attitudes do not. Finally, we also cast doubts on the predictive power of the two tests.
Inequity aversion and trustees' reciprocity in the trust game
European Journal of Political Economy, 2007
The introduction of inequity concerns into the Trust Game gives rise to complementary concepts of conditional trustworthiness and unconditional untrustworthiness. When the inequity concern is not accounted for, unconditional untrustworthiness is overestimated. The high proportion of trustees adopting the equal division behavioural norm suggests that an unequal distribution of show-up fees may deter trustors from placing trust, and may eventually reduce the incentive to cooperate for both players. It also follows that increases in income inequality can explain declines in self-reported trust in high-income countries.
European Journal of Social Psychology, 2004
Three types of trusting have been distinguished conceptually and empirically. In cooperative trusting the trust giver explicitly expects a reaction from the trust recipient that fits with the equality norm. In pure trusting, no explicit expectation is expressed by the giver. In selfish trusting the giver explicitly expects a reaction that benefits himself or herself at the expense of the recipient. We asked whether the three types of trust elicit distinctive reactions from trust recipients. Each participant was paired with a fictitious player who ostensibly enabled him or her to divide money between them. As hypothesized, both cooperative and pure trusting elicited more equal allocations than did selfish trusting. A second hypothesis, that cooperative trust would yield more equal allocations than pure trust, was not supported. Results are discussed in terms of equality norm, self-interest norm, reciprocity norm, reactance theory, social sanctioning, and the need to comply with others' expectations.
2021
We study behavior in a trust game where first-movers initially have a higher endowment than second-movers but the occurrence of a positive random shock can eliminate this inequality by increasing the endowment of the second-mover before the decision of the first-mover. We find that second-movers return less (i.e., they are less trustworthy) when they have a lower endowment than first-movers, compared with the case in which first and second-movers have the same endowment. Second-movers who received the positive shock return more than those who did not; in fact, secondmovers who received the positive shock return more than second-movers who had the same endowment as the first-mover from the outset. First-movers do not seem to anticipate this behavior from second-movers. They send less to second-movers who benefited from a shock. These findings suggest that in addition to the distribution of the endowments the source of this distribution plays an important role in determining the levels of trust and trustworthiness. This, in turn, implies that current models of inequality aversion should be extended to accommodate for reference points if random positive shocks are possible in the trust game.
Intermediaries in Trust: An Experimental Study on Incentives and Norms
Trust situations involve a certain amount of risk for trustors that trustees can abuse. Knowing this, rational individuals might not place trust in others. In many real situations, intermediaries exist that play a crucial role helping trustors and trustees to cooperate. The question is how intermediaries can be motivated to accomplish this important task. We have investigated this by performing various experimental tests on a modified version of the investment game, where we introduced intermediaries who rated the behavior of trustees for the benefit of trustors. We manipulated incentive schemes and tested various role structures. We found that intrinsic motivations can increase the positive impact of the intermediaries on cooperation between trustors and trustees, even more than any material incentive, provided that there is room for indirect reciprocity strategies. Our results show the importance of intrinsic motivations of individuals and circumscribe the power and generalizability of material incentives for cooperation.
Altruism and Gender in the Trust Game
SSRN Electronic Journal, 2000
This paper analyses gender differences in the trust game. Our experiment implements the triadic design proposed by to discriminate between transfers resulting from trust or trustworthiness and transfers resulting from altruistic preferences. We observe that women exhibit a higher degree of altruism than men for both trust and trustworthiness but relatively more for trustworthiness. This result provides an explanation to the experimental finding that women reciprocate more than men. JEL classification: C90; C91; D64; J16
It takes two to cheat: An experiment on derived trust
European Economic Review, 2013
Social life offers innumerable instances in which trust decisions involve multiple agents. Of particular interest is the case when a breach of trust is not profitable if carried out in isolation, but requires an agreement among agents. In such situations the pattern of behaviors is richer than in dyadic games, because even opportunistic trustees who would breach trust when alone may act trustworthily based on what they believe to be the predominant course of action. Anticipating this, trusters may be more inclined to trust. We dub these motivations derived trustworthiness and derived trust. To capture them, we design a "Collective Trust Game" and study it by means of a laboratory experiment. We report that overall levels of trustworthiness are almost thirty percentage points higher when derived motivations are present, and this generates also higher levels of trust. In our set-up, the effects of derived trustworthiness are comparable in size to positive reciprocity, and more important than concerns for equality.
The Trust Game Does Not (Only) Measure Trust: The Risk-Trust Confound Revisited
," Journal of Behavioral and Experimental Economics, 2019
The trust game has become the behavioral measure of choice in social science investigations of trust. This measure is often used uncritically to compare levels of trust across people and cultures even though those levels may be affected by people's attitudes to risk. We evaluate an incentive-compatible experiment designed to investigate the potential for a risk-trust confound using a sample of 202 students at the University of Cape Town in 2016. We depart from the earlier risk-trust literature by using a risk preference task that incorporates a wide range of prizes and probabilities. This allows us to investigate whether earlier ambiguous results concerning risk-trust interactions simply reflect weak measurement instruments, and facilitates the estimation of structural econometric risk preference models. We find that amounts sent in the trust game are indeed associated with attitudes to risk, that the magnitude of this relationship is economically significant, and that it is robust across statistical models. In addition, we find that most previous studies of the risk-trust confound use preference elicitation mechanisms that are underpowered for identifying risk-trust relationships. Our results caution against the widespread use of the trust game to measure and compare levels of trust without careful adjustments for risk attitudes.
Epistemic conditions and social preferences in trust games
2008
It is well-known that subjects in bilateral bargaining experiments often exhibit choice behavior suggesting there are strong reciprocators in the population. But it is controversial whether explaining this data requires a social preference model that invokes genuine strong reciprocity or whether some social preference model built on other-regarding preferences as a surrogate can explain it. Since the data precedes theory here, all the social preference models agree on most of it-making direct tests more difficult. We report results from a laboratory experiment using a novel method for testing between the classes of social preference models in the trust game that manipulates the distribution of payoff information in the game. We find evidence supporting the strong reciprocity hypothesis.
Increases in trust and altruism from partner selection: Experimental evidence
Experimental Economics, 2008
This paper examines how selection affects trust and altruism in a Trust and Modified Dictator Game. Past Trust and Dictator game experiments not allowing partner selection show substantially more trust and altruism than equilibrium predicts. We predict partner selection will cause sorting in which behavior across partner types without selection will be positively correlated with partner choice. This selection pattern will cause trust and altruism to be higher with selection and the increase will be proportional to a maximum possible gain. We find selection has all these effects. We also find greater gains in the Trust than Modified Dictator game consistent with larger possible gains in the Trust game. The results imply that theories ignoring selection will underestimate trust and altruism in markets with selection.
Discriminating strategic reciprocity and acquired trust in the repeated trust-game
2011
In repeated trust-game offers made by investors can be attributed to strategic reciprocation-based behavior. However, when a trustee is loyal, personal trust can build up between players, in the same way that lack of positive reciprocation on the part of trustees can motivate investors' distrust. Acquired personal trust or distrust and strategic reciprocation of the opponent's offers have then a cumulative and convergent influence on behavior in the trust game and are not prima facie distinguishable. We propose an experimental protocol which discriminates between these two determinants of trust. We furthermore show that acquired trust is the mere outcome of anonymous repeated interactions taking place during the experiment in the sense that it does not co-vary with an initial and independent baseline disposition to trust among investors: acquired trust crowds out background trust. Moreover, offers are sensitive to the amount and variance of trustees' returns. High ret...
Effects of Financial Incentives on the Breakdown of Mutual Trust
Psychological Science, 2002
Disagreements between psychologists and economists about the need for and size of financial incentives continue to be hotly discussed. We examine the effects of financial incentives in a class of interactive decision making situations, called centipede games, in which mutual trust is essential for cooperation. Invoking backward induction, the Nash equilibrium solution for these games is counterintuitive. Our previous research showed that when the number of players in the centipede game is increased from two to three, the game is iterated in time, the players are re-matched, and the stakes are unusually high, behavior approaches equilibrium play. Results from the present study show that reducing the size of the stakes elicits dramatically different patterns of behavior. We argue that when mutual trust is involved the magnitude of financial incentives can induce a considerable difference.
Playing both roles in the trust game
Journal of Economic Behavior & Organization, 2003
This paper examines the effect of subjects playing both roles in a trust game. We compare two information treatments to our replication of the single-role trust game. The treatments alter the point at which participants are told they will play both roles. We find that playing both roles reduces both trust and reciprocity. We also explore relationships between demographic and personality characteristics and decisions in the game. We find that a social-psychological measure of Machiavellian behavior predicts distrust but not a lack of trustworthiness, and that non-white participants trust less in a predominantly white environment, but are no less trustworthy.
Social Risk and Ambiguity in the Trust Game
SSRN Electronic Journal, 2012
A trustor faces a risky choice in the trust game when he acts upon his belief regarding the chances of betrayal by the trustee. Despite intensive research there is no clear evidence for a link between lottery risk preferences and risk involved in trusting others. We argue that this is due to crucial differences between the risk measurements in the two settings. Trusting is giving up control to a human while lottery risk arises from a mechanistic randomization device. We propose a risky trust game that experimentally measures risk in the same context as the standard trust game, but nevertheless reduces the trust decision to objective risk. Our results show that transfers in the trust game can indeed be explained by individual risk attitudes elicited with the risky trust game, while lottery risk preferences have no explanatory power.
Trustworthiness is a social norm, but trusting is not
Politics, Philosophy and Economics, 10 (2): 170-187, 2011
"Previous literature has demonstrated the important role that trust plays in developing and maintaining well-functioning societies. However, if we are to learn how to increase levels of trust in society, we must first understand why people choose to trust others. One potential answer to this is that people view trust as normative: there is a social norm for trusting that imposes punishment for noncompliance. To test this, we report data from a survey with salient rewards to elicit people’s attitudes regarding the punishment of distrusting behavior in a trust game. Our results show that people do not behave as though trust is a norm. Our participants expected that most people would not punish untrusting investors, regardless of whether the potential trustee was a stranger or a friend. In contrast, our participants behaved as though being trustworthy is a norm. Most participants believed that most people would punish someone who failed to reciprocate a stranger’s or a friend’s trust. We conclude that, while we were able to reproduce previous results establishing that there is a norm of reciprocity, we found no evidence for a corresponding norm of trust, even among friends."
Self-serving biases and public justifications in Trust games
Synthese 190, 5, 2013: 909-922
Often, when several norms are present and may be in conflict, individuals will display a self-serving bias, privileging the norm that best serves their interests. Xiao and Bicchieri (J Econ Psychol 31(3):456-470, 2010) tested the effects of inequality on reciprocating behavior in trust games and showed that-when inequality increases-reciprocity loses its appeal. They hypothesized that self-serving biases in choosing to privilege a particular social norm occur when the choice of that norm is publicly justifiable as reasonable, even if not optimal for one of the parties. In line with the literature on motivated reasoning, this justification should find some degree of support among third parties. The results of our experimental survey of third parties support the hypothesis that biases are not always unilateral selfish assessments. Instead, they occur when the choice to favor a particular norm is supported by a shared sense that it is a reasonable and justifiable choice.
Intentionality Matters for Third-Party Punishment but not Compensation in Trust Games
Journal of Economic Behavior and Organization , 2022
We investigate how the intentionality of investors or trustees' actions affects third party compensation and punishment interventions after a trust game. Investors and trustees are randomly assigned to conditions where they either make intentional choices or their choices are made by a random machine. Overall, we find that lack of reciprocity is punished more than lack of trust, and third parties exhibit strong preferences for compensation over punishment. We find that only the punishment choice is affected by the intentionality of parties' actions, whereas compensation occurs in all conditions, whether lack of trust or reciprocity has been intentional or unintentional.
A large experimental literature has investigated the determinants of trust using variants of the so called trust game. However, a lot of ambiguity remains regarding the definition of what one is trusting: one extreme view is that since there are no explicit promises or guarantees made in the trust game, cheating is not defined and therefore trust is not implied. We address this concern by asking trust game participants their notion of cheating. We find that i) senders do have a notion of cheating, ii) the majority of senders would feel cheated by a negative return on their trust/investment, whereas a sizable minority defines cheating according to an equal split rule. The fact that participants in the trust game have a notion of what cheating behavior is does not necessarily prove that trust is affected by it. We show that participants’ trust behavior is significantly affected by their beliefs about the probability of being cheated. Given the importance of cheating in a trust game, we finally look at its determinants, unveiling the importance of values instilled by parents.