Advanced Search
MyIDEAS: Login

Trust and trustworthiness in networked exchange

Contents:

Author Info

  • Cassar, Alessandra
  • Rigdon, Mary

Abstract

This paper focuses on the interaction between network structure, the role of information, and the level of trust and trustworthiness in 3-node networks. We extend the investment game with one Sender and one Receiver to networked versions -- one characterized by one Sender and two Receivers ([1s-2r]) and one characterized by two Senders and one Receiver ([2s-1r]) -- under two information conditions, full and partial. We develop a comparative model of trust for the networked exchange environments and generate two hypotheses: (1) what counts as a signal of trust depends on investment behavior along the other link in the network and (2) this type of trust can be leveraged under full information, increasing the rate of cooperation on the side of the exchange with multiple traders. The results generally support our hypotheses: trust is comparative and under full information, the [1s-2r] network shows higher trustworthiness and the [2s-1r] network displays higher trust.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.sciencedirect.com/science/article/B6WFW-4YY8N0D-1/2/977704e318cf1ca2a140d56c4c8ebde6
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Elsevier in its journal Games and Economic Behavior.

Volume (Year): 71 (2011)
Issue (Month): 2 (March)
Pages: 282-303

as in new window
Handle: RePEc:eee:gamebe:v:71:y:2011:i:2:p:282-303

Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/622836

Related research

Keywords: Trust Trustworthiness Networks Investment Information Experiment;

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Berninghaus, Siegfried K. & Schwalbe, Ulrich, 1996. "Evolution, interaction, and Nash equilibria," Journal of Economic Behavior & Organization, Elsevier, vol. 29(1), pages 57-85, January.
  2. Ellison, Glenn & Fudenberg, Drew, 1995. "Word-of-Mouth Communication and Social Learning," The Quarterly Journal of Economics, MIT Press, vol. 110(1), pages 93-125, February.
  3. Mary Rigdon, 2005. "Trust and Reciprocity in Incentive Contracting," Experimental 0511007, EconWPA.
  4. Zak, Paul J & Knack, Stephen, 2001. "Trust and Growth," Economic Journal, Royal Economic Society, vol. 111(470), pages 295-321, April.
  5. James C. Cox & Daniel Friedman & Vjollca Sadiraj, 2008. "Revealed Altruism," Econometrica, Econometric Society, vol. 76(1), pages 31-69, 01.
  6. Sen, A., 1996. "Maximisation and the Act of Choice," Papers 270, Banca Italia - Servizio di Studi.
  7. McCabe, Kevin A. & Rigdon, Mary L. & Smith, Vernon L., 2003. "Positive reciprocity and intentions in trust games," Journal of Economic Behavior & Organization, Elsevier, vol. 52(2), pages 267-275, October.
  8. Kosfeld Michael, 2004. "Economic Networks in the Laboratory: A Survey," Review of Network Economics, De Gruyter, vol. 3(1), pages 1-23, March.
  9. Alvin E. Roth & V. Prasnikar & M. Okuno-Fujiwara & S. Zamir, 1998. "Bargaining and market behavior in Jerusalem, Liubljana, Pittsburgh and Tokyo: an experimental study," Levine's Working Paper Archive 344, David K. Levine.
  10. Eshel, Ilan & Samuelson, Larry & Shaked, Avner, 1998. "Altruists, Egoists, and Hooligans in a Local Interaction Model," American Economic Review, American Economic Association, vol. 88(1), pages 157-79, March.
  11. Urs Fischbacher & Christina M. Fong & Ernst Fehr, . "Fairness, Errors and the Power of Competition," IEW - Working Papers 133, Institute for Empirical Research in Economics - University of Zurich.
  12. Karlan, Dean & Mobius, Markus & Rosenblat, Tanya & Szeidl, Adam, 2009. "Trust and Social Collateral," Staff General Research Papers 13026, Iowa State University, Department of Economics.
  13. Scheinkman, Jose A. & Soutter, Christine L. & Glaeser, Edward Ludwig & Laibson, David I., 2000. "Measuring Trust," Scholarly Articles 4481497, Harvard University Department of Economics.
  14. Pierpaolo Battigalli & Martin Dufwenberg, 2005. "Dynamic Psychological Games," Levine's Bibliography 784828000000000046, UCLA Department of Economics.
  15. Charness, Gary B & Corominas-Bosch, Margarida & FRECHETTE, GUILLAUME, 2005. "Bargaining and Network Structure: An Experiment," University of California at Santa Barbara, Economics Working Paper Series qt7v98682v, Department of Economics, UC Santa Barbara.
  16. Iris Bohnet & Steffen Huck, 2004. "Repetition and Reputation: Implications for Trust and Trustworthiness When Institutions Change," CREMA Working Paper Series 2004-09, Center for Research in Economics, Management and the Arts (CREMA).
  17. Berninghaus, Siegfried K. & Ehrhart, Karl-Martin, 1998. "Time horizon and equilibrium selection in tacit coordination games: Experimental results," Journal of Economic Behavior & Organization, Elsevier, vol. 37(2), pages 231-248, October.
  18. Patrick Bayer & Stephen L. Ross & Giorgio Topa, 2005. "Place of Work and Place of Residence: Informal Hiring Networks and Labor Market Outcomes," Working Papers 927, Economic Growth Center, Yale University.
  19. Laurence K. Eisenberg, 1995. "Connectivity and Financial Network Shutdown," Working Papers 95-04-041, Santa Fe Institute.
  20. Margin Dufwenberg & Georg Kirchsteiger, 2001. "A Theory of Sequential Reciprocity," Levine's Working Paper Archive 563824000000000090, David K. Levine.
  21. Jackson, Matthew O. & Kalai, Ehud, 1997. "Social Learning in Recurring Games," Games and Economic Behavior, Elsevier, vol. 21(1-2), pages 102-134, October.
  22. La Porta, Rafael, et al, 1997. "Trust in Large Organizations," American Economic Review, American Economic Association, vol. 87(2), pages 333-38, May.
  23. Fiona Greig & Iris Bohnet, 2008. "Is There Reciprocity In A Reciprocal-Exchange Economy? Evidence Of Gendered Norms From A Slum In Nairobi, Kenya," Economic Inquiry, Western Economic Association International, vol. 46(1), pages 77-83, 01.
  24. Lawrence Blume, 1993. "The Statistical Mechanics of Best-Response Strategy Revision," Game Theory and Information 9307001, EconWPA, revised 26 Jan 1994.
  25. Glen Ellison, 2010. "Learning, Local Interaction, and Coordination," Levine's Working Paper Archive 391, David K. Levine.
  26. Burks, Stephen V. & Carpenter, Jeffrey P. & Verhoogen, Eric, 2003. "Playing both roles in the trust game," Journal of Economic Behavior & Organization, Elsevier, vol. 51(2), pages 195-216, June.
  27. John Duffy & Dean Corbae, 2006. "Experiments with Network Formation," Working Papers 292, University of Pittsburgh, Department of Economics, revised Aug 2007.
  28. Fehr, Ernst & Kirchsteiger, George & Riedl, Arno, 1993. "Does Fairness Prevent Market Clearing? An Experimental Investigation," The Quarterly Journal of Economics, MIT Press, vol. 108(2), pages 437-59, May.
  29. Cary Deck & Cathleen Johnson, 2004. "Link bidding in laboratory networks," Review of Economic Design, Springer, vol. 8(4), pages 359-372, 04.
  30. Avner Ben-Ner & Louis Putterman, . "Trust, Communication and Contracts: An Experiment," Working Papers 0206, Human Resources and Labor Studies, University of Minnesota (Twin Cities Campus).
  31. Cochard, Francois & Nguyen Van, Phu & Willinger, Marc, 2004. "Trusting behavior in a repeated investment game," Journal of Economic Behavior & Organization, Elsevier, vol. 55(1), pages 31-44, September.
  32. Hellerstein, Judith K. & McInerney, Melissa & Neumark, David, 2008. "Measuring the Importance of Labor Market Networks," IZA Discussion Papers 3750, Institute for the Study of Labor (IZA).
  33. Matt Jackson, 2003. "The Effects of Social Networks on Employment and Inequality," Theory workshop papers 658612000000000032, UCLA Department of Economics.
  34. Nancy Buchan & Rachel Croson, 1999. "Gender and Culture: International Experimental Evidence from Trust Games," American Economic Review, American Economic Association, vol. 89(2), pages 386-391, May.
  35. Andreas Ortmann & John Fitzgerald & Carl Boeing, 2000. "Trust, Reciprocity, and Social History: A Re-examination," Experimental Economics, Springer, vol. 3(1), pages 81-100, June.
  36. Berg Joyce & Dickhaut John & McCabe Kevin, 1995. "Trust, Reciprocity, and Social History," Games and Economic Behavior, Elsevier, vol. 10(1), pages 122-142, July.
  37. Ananish Chaudhuri & Lata Gangadharan, 2007. "An Experimental Analysis of Trust and Trustworthiness," Southern Economic Journal, Southern Economic Association, vol. 73(4), pages 959–985, April.
  38. Gale, Douglas & Kariv, Shachar, 2003. "Bayesian learning in social networks," Games and Economic Behavior, Elsevier, vol. 45(2), pages 329-346, November.
  39. Conlin, Michael & Lynn, Michael & O'Donoghue, Ted, 2003. "The norm of restaurant tipping," Journal of Economic Behavior & Organization, Elsevier, vol. 52(3), pages 297-321, November.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. M. Bigoni & S. Bortolotti & M. Casari & D. Gambetta, 2012. "Trustworthy by Convention," Working Papers wp827, Dipartimento Scienze Economiche, Universita' di Bologna.
  2. Regner, Tobias & Riener, Gerhard, 2012. "Motivational cherry picking," DICE Discussion Papers 68, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
  3. Bigoni, Maria & Bortolotti, Stefania & Casari, Marco & Gambetta, Diego, 2013. "It takes two to cheat: An experiment on derived trust," European Economic Review, Elsevier, vol. 64(C), pages 129-146.
  4. Stefan Bauernschuster & Oliver Falck & Niels Große, 2010. "Can Competition Spoil Reciprocity? - A Laboratory Experiment," CESifo Working Paper Series 2923, CESifo Group Munich.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:eee:gamebe:v:71:y:2011:i:2:p:282-303. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.