Trust and reciprocity in inter-individual versus inter-group interactions: The effects of social influence, group dynamics, and perspective biases

Using an experimental trust game, I examine whether the perspectives and behavior of group representatives and consensus groups differ from those of the same individuals in an analogous inter-individual situation. A primary goal of this research is to extend past work on trust and reciprocity by examining the impact of the social contexts within which social interactions are characteristically embedded. Specifically, this research concerns whether norms and dynamics of trust and reciprocity differ in the contexts of inter-individual and inter-group interactions. First, I examine whether dynamics of trust and reciprocity differ in various inter-group interactions where inter-group decisions are operationalized as 1) autonomous group representatives, i.e., individuals who are given the responsibility of unilaterally making a decision on behalf of a three-person group engaging with a group representative of another such group; and 2) consensus groups, i.e., group members making a consensus trust or reciprocity decision for their groups via a collective process with another such group. Results of these studies show that 1) people trust less and reciprocate less when responsible for a group or organizational decision as autonomous group representatives; 2) consensus groups do not differ from individuals in their level of trust but show dramatically less reciprocity. The group consensus mechanism in fact produced by far the lowest reciprocity level, significantly lower than that exhibited by either individuals or autonomous group representatives. Thus, inter-group trust and reciprocity dynamics are not readily inferable from their inter-individual counterparts. Moreover, an important implication is emerging here: the extent and direction of the discrepancy between individual and group choices in regard to trust and reciprocity levels and possibly other social preferences in general may depend importantly on the precise details of the group decision-making mechanism, for example whether decisions are made consensually, by majority vote, or by a group leader or representative. In addition to examining the level of trust and reciprocity that occur in these various situations, I also studied, using both behavioral and questionnaire data, the roles of self-interest, social influence, and group dynamics in trust and reciprocity perceptions and behavior. The results showed that there exist discrepancies between behavioral forecasts and the actual behavior, and that trusting behavior is driven strongly by expectation of level of reciprocation, while reciprocating behavior is driven strongly by the difference between trust expectation and actual trust received.     

Playing the trust game with other people’s money

We experimentally investigate to what extent people trust and honor trust when they are playing with other people’s money (OPM). We adopt the well-known trust game by Berg et al. (in Games Econ. Behav. 10:122–142, 1995), with the difference that the trustor (sender) who sends money to the trustee (receiver) does this on behalf of a third party. We find that senders who make decisions on behalf of others do not behave significantly different from senders in our baseline trust game who manage their own money. But receivers return significantly less money when senders send a third party’s money. As a result, trust is only profitable in the baseline trust game, but not in the OPM treatment. The treatment effect among the receivers is gender specific. Women return significantly less money in OPM than in baseline, while there is no such treatment effect among men. Moreover, women return significantly less than men in the OPM treatment.     

Social norms, information, and trust among strangers: theory and evidence

Can a social norm of trust and reciprocity emerge among strangers? We investigate this question by examining behavior in an experiment where subjects repeatedly play a two-player binary “trust” game. Players are randomly and anonymously paired with one another in each period. The main questions addressed are whether a social norm of trust and reciprocity emerges under the most extreme information restriction (anonymous community-wide enforcement) or whether trust and reciprocity require additional, individual-specific information about a player’s past history of play and whether that information must be provided freely or at some cost. In the absence of such reputational information, we find that a social norm of trust and reciprocity is difficult to sustain. The provision of reputational information on past individual decisions significantly increases trust and reciprocity, with longer histories yielding the best outcomes. Importantly, we find that making reputational information available at a small cost may also lead to a significant improvement in trust and reciprocity, despite the fact that most subjects do not choose to purchase this information.     

Collective Trust Behavior*

This paper investigates trust behavior in situations where decision‐makers are large groups and the decision mechanism is collective. Theories from behavioral economics and psychology suggest that trust in such situations may differ from interindividual trust. The experimental results here reveal a large difference in trust but not in trustworthiness between the individual and collective setting. Furthermore, a field experiment captures the determinants of collective trust behavior among two Swedish cohorts. Beliefs about the other group and one's own group are strongly associated with collective trustworthiness and trust behavior.     

Social division,trust, and reciprocity among Chinese inmates

Social capital promotes cooperation between people and, in turn, economic growth and stability. Trust and trustworthiness are components of social capital that are associated with economic success. This paper provides insight into the impact of social division on cooperative behavior. We use the one-shot investment game to measure trust and reciprocity among inmates in a Chinese prison, which offers an institutional setting that allows us to examine how social interaction, or a lack thereof, fosters cooperation. Results show that the variation in social division through physical separation does not have a significant impact on cooperative behavior among inmates. However, inmates are more trusting than our benchmark group of university students even though inmates have faced significant life challenges. While social interaction fails to boost trust and reciprocity, childhood experience and family environment mold social preferences. In particular, reciprocity deteriorates for those who have migrant mothers.     

Social responsibility promotes conservative risk behavior

Previous studies show that group risk taking can be more conservative than individual risk taking. Two common, but untested reasons for this greater caution are the influence of social responsibility and a tendency to conform to the preferences of others. We study changes in risk taking in simple settings, where another’s risk taking can sometimes be observed, and where decisions affect not only one’s own payoffs but sometimes also affect those of a passive, second party. We find that social responsibility leads to more conservative risk behavior in group decision making. Conformism has a more symmetric effect: observing the choice of another tends to lead both individual and social decisions toward whatever the other’s expressed risk preference is. Direct tests fail to link the social behavior we observe to the social preference for distributional fairness common in decision-making under certainty.     

How to identify trust and reciprocity

This paper uses a three-games (or triadic) design to identify trusting and reciprocating behavior. A large literature on single-game trust and reciprocity experiments is based on the implicit assumption that subjects do not have altruistic or inequality-averse other-regarding preferences. Such experimental designs test compound hypotheses that include the hypothesis that other-regarding preferences do not affect behavior. In contrast, experiments with the triadic design do discriminate between transfers resulting from trust or reciprocity and transfers resulting from other-regarding preferences that are not conditional on the behavior of others. Decomposing trust from altruism and reciprocity from altruism or inequality aversion is critical to obtaining empirical information that can guide the process of constructing models that can increase the empirical validity of game theory.     

Induced heterogeneity in trust experiments

Several non-experimental studies claim that heterogeneity among individuals reduces trust. A few experimental studies have examined the effects of naturally-occurring differences among subjects on trusting behavior, and in contrast, most have not supported these claims. We adopt a novel approach by inducing heterogeneity among subjects in a canonical trust experiment. We accomplish this by varying the show-up payments given to subjects for participating in the experiment. We find that this induced inequality does not consistently affect first- or second-mover behavior in the classic trust game in the manner predicted by either previous theoretical work or empirical studies of survey-based measures of trust. Further, the effect of inequality on trust, in terms of both sign and significance, depends on whether show-up payments are awarded publicly or privately. JEL Classification C9, Z13     

Trust, Responsibility and the Interpretation of Contingent Valuation Results

Responses to contingent valuation questionnaires are contingent on respondent perceptions of trust and responsibility regarding aspects of the scenario presented to them. These issues can influence CV responses in several ways, with the net effect on WTP estimates depending on the relative prevalence of the different opposing effects in a given application. Whether such effects are to be considered biases, to be removed where possible, depends on the notion of validity one adopts. Whilst issues of trust and responsibility may pose little threat to predictive notions of validity, they are more problematic from a surplus validity, cost-benefit, perspective. Further discussion of the pros and cons of different validity notions for contingent valuation is required.     

Warshall ANP算法下创业投资家对创业者信任的动态考量因素研究

大量研究证实，创业投资家对创业者的信任是影响创业合作成功的关键因素。但有关投资家对创业者信任考量因素的研究相对缺乏，且现有研究对考量因素动态性关注不足。因此，结合创业情境，首先对投资决策阶段进行划分，构建创业投资家对创业者在不同投资决策阶段的信任考量因素模型。其次，建立基于Warshall ANP的信任动态考量因素评估模型，即利用Warshall算法确定各因素及指标间的相互关系；运用ANP方法计算各因素及指标在不同投资决策阶段的权重。最后，以黑龙江省领航创投孵化器为例进行实证分析，探讨方法应用效果。结果表明，在搜寻阶段，投资家对创业者信任的主要考量因素为关系因素；在选择阶段和投资决策后阶段，投资家主要基于认知因素对创业者产生信任，同时关系因素调节投资家对创业者的信任认知。     

员工的信任结构与知识共享

信任是员工在组织内实现知识共享的重要心理机制。本文通过对208个样本的基于认知的普遍信任和基于组织成员身份的组织信任的测量,证明了普遍信任与组织信任相互独立并存在一定程度的相关。通过回归分析,普遍信任中性善认知因素、组织信任中组织行为信任因素对于员工知识共享的意愿与行为有着更高程度的影响。从一个角度说明中国人不仅不缺乏普遍信任,而且与他人共享知识的行为也不完全以“情感关系”为特征。     

Do reputation feedback systems really improve trust among anonymous traders? An experimental study

Feedback systems are claimed to be a crucial component of the success of electronic marketplaces like eBay or Amazon Marketplace. This article aims to compare the effects of various feedback systems on trust between anonymous traders, through a set of experiments based on the trust game. Our results indicate that trust is significantly improved by the introduction of a reputation feedback system. However, such mechanisms are far from being perfect and are vulnerable to strategic ratings and reciprocation. Our findings indicate that some changes in rating rules may significantly improve the efficiency of feedback systems, by avoiding strategic rating or reciprocation, and hence stimulate trust and trustworthiness among traders. In particular, a system in which individuals are not informed of their partner's rating decision before making their own decision provides better results, both in terms of trust and earnings.     

长期服务关系中的顾客行为：信任和承诺的作用

本文通过抽样调查方法检验了在长期服务关系中顾客信任和承诺对顾客行为的影响机制。研究发现,顾客信任和承诺对顾客合作和正面口碑都具有类似的积极影响;顾客承诺可以降低顾客机会主义行为,而信任没有这一功能;顾客信任可以提高顾客在服务关系中的灵活性,而承诺则不起作用;顾客信任还提高了顾客正式控制机制的使用效果,顾客承诺则降低了对服务企业单方面行为的默许。     

Does competition foster trust? The role of tournament incentives

Members of organizations are often called upon to trust others and to reciprocate trust while at the same time competing for bonuses or promotions. We suggest that competition affects trust not only within dyads including direct competitors, but also between individuals who do not compete against each other. We test this idea in a trust game where trustors and trustees are rewarded based either on their absolute performance or on how well they do relative to players from other dyads. In Experiment 1, we show that competition among trustors significantly increases trust. Competition among trustees decreases trustworthiness, but trustors do not anticipate this effect. In Experiment 2, we additionally show that the increase in trust under competition is caused by a combination of increased risk taking and lower sensitivity to non-financial concerns specific to trust interactions. Our results suggest that tournament incentives might have a “blinding effect” on considerations such as betrayal and inequality aversion.     

Similarities and differences when building trust: the role of cultures

We run an experiment in which students of different European nationalities are matched in groups of five and repeatedly choose with whom within their group they want to play a trust game. Participants observe of each other age, gender, nationality and number of siblings. The region of origin, “North” or “South” is a major determinant of success in the experiment. Participants tend to trust those they trusted before and who trusted them. We do not find evidence of regional discrimination per se. It is only the underlying and significant differences in behavior that translate through repeated interactions into differences in payoffs between the two regions.     

Solidarity among the poor

We conduct a field experiment with low-income subjects in Dallas, Texas. We examine voluntary, informal risk sharing using a visual representation of the solidarity game developed for low-literacy populations. We find substantially more ‘fixed gift to loser’ behavior and less ‘egotistical’ behavior than in previous studies. Individuals who display ‘egotistical’ behavior are more risk tolerant. The amount of the conditional gifts is positively related to age, income, and connection to the community. However, trust and empathy, which are commonly discussed as drivers for solidarity, are not significantly related to the amount given.     

Trust,trust games and stated trust: Evidence from rural Bangladesh

Levels of trust are measured by asking standard survey questions on trust and by observing behavior in a trust game using a random sample in rural Bangladesh. Follow-up questions and correlations between stated expectations and the amount sent in the trust game reveal that the amount sent is correlated with a general measure of trust. The trust and need motives combined with expectations explains differences in amounts sent, and this highlights the potential importance of motives that cannot be inferred directly from people's behavior and expectations alone.     

Trust, trustworthiness, and risk in rural Paraguay

This dissertation looks at the relationship between trust, trustworthiness, and risk aversion in a rural Paraguayan setting. The first chapter of this dissertation looks at theft between farmers. Rural areas of developing countries often lack effective legal enforcement. However, villagers who know each other well and interact repeatedly may use implicit contracts to minimize crime. I construct a dynamic limited-commitment model in which a thief cannot credibly commit to forego stealing from his fellow villagers but may be induced to limit his stealing by the promise of future gifts from his potential victim. Using a unique survey from rural Paraguay which combines traditional data on production with information on theft, gifts, and trust, as well as with experiments measuring trust and trustworthiness, I test whether the data is consistent with predictions from the dynamic model. The results provide evidence that, in contrast with predictions from a one-period model with an anonymous thief, farmers do implicitly contract with one another to limit theft. Farmers who have more close family members in their village give fewer gifts, and farmers with plots which are more difficult to steal from give fewer gifts, experience less theft, and trust more. Gift-giving increases when trust is lower and the threat of theft is greater, turning the social capital literature on its head. The second chapter of this dissertation looks at a different linkage between trust, trustworthiness, and risk. Trusting behavior in general and play in the traditional trust experiment specifically depend both on trust beliefs and on levels of risk aversion. I ran two experiments with a diverse set of subjects in fifteen villages of rural Paraguay, the traditional trust experiment and a new experiment measuring only risk aversion. I find that risk attitudes are highly predictive of play in the trust game. In addition, omitting risk aversion as a regressor in trust regressions significantly changes the coefficients of important explanatory variables such as gender and wealth. The chair of this dissertation committee was Ethan Ligon and the other committee members were George Akerlof and Elisabeth Sadoulet.     

Experimental evidence on personality traits and preferences

Using an experiment, we test the relation between personality traits and revealed risk and ambiguity preferences, and we consider the effects of personality traits prevalence in a group on the decision making of each group member. In the experiment, subjects reveal their risk and ambiguity preferences through lottery choices. They then participate in an unstructured group chat. Afterwards, they are given the chance to revise their initial lottery choices. Results show that personality traits affect ambiguity but not risk preferences before the chat. Specifically, agreeableness is negatively related to ambiguity aversion. We also show that the probability of changing decisions after the chat is affected by the individual's personality traits but not by the traits of the other group members. The latter only affects the direction and the degree of the change.     

Entrepreneurship,trust and corruption

I propose a theoretical model where trust towards strangers is a channel through which institutions determine economic outcomes, in particular, entrepreneurship and corruption. More importantly, I show that the role of trust has been overlooked since high levels of trust do not always enhance desirable economic outcomes. Trust helps individuals to participate in economic exchanges aligned with social welfare, but it also facilitates individuals to cooperate for the achievement of corrupt deals. Under this more general view of trust, the model generates a non-trivial new prediction at the individual level. Specifically, the individual-level relationship between honesty and trust changes depending on the institutional quality of a country. Dishonest individuals are the more trusting individuals in countries with poor institutions, and the less trusting in countries with good institutions. Using individual-level data of 80 countries from the World Value Survey and the European Values Study, I present empirical evidence in support of this prediction.