Social Networks and Trust: not the Experimental Evidence you may Expect
AbstractWe run a laboratory experiment were friendship networks are generated endogenously within an anonymous group. Our experiment builds on two phases in sequence: a network formation game and a trust game. We find that in those sessions where the trust game is played before the network formation game, the overall level of trust is not significantly different from the one observed in a simple trust game; in those sessions where the trust game is played after the network formation game we find that the overall level of trust is significantly lower than in the simple trust game. Hence surprisingly trust does not increase because of enforced reciprocity and moreover a common social history does affect the level of trust, but in a negative manner. Where network effects matter is in the choice of whom to trust: while we tend to trust less on average those with whom we have already interacted compared to total strangers, past history allows us to select whom to trust relatively more than others.
Download InfoIf 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.
Bibliographic InfoPaper provided by Birkbeck, Department of Economics, Mathematics & Statistics in its series Birkbeck Working Papers in Economics and Finance with number 0801.
Date of creation: Jan 2008
Date of revision:
Contact details of provider:
Postal: Malet Street, London WC1E 7HX, UK
Phone: 44-20- 76316429
Fax: 44-20- 76316416
Web page: http://www.ems.bbk.ac.uk/
Find related papers by JEL classification:
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
- L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-02-02 (All new papers)
- NEP-CBE-2008-02-02 (Cognitive & Behavioural Economics)
- NEP-EVO-2008-02-02 (Evolutionary Economics)
- NEP-EXP-2008-02-02 (Experimental Economics)
- NEP-GTH-2008-02-02 (Game Theory)
- NEP-NET-2008-02-02 (Network Economics)
- NEP-SOC-2008-02-02 (Social Norms & Social Capital)
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.:
- Armin Falk, Michael Kosfeld, .
"It's all about Connections: Evidence on Network Formation,"
IEW - Working Papers
146, Institute for Empirical Research in Economics - University of Zurich.
- Falk Armin & Kosfeld Michael, 2012. "It's all about Connections: Evidence on Network Formation," Review of Network Economics, De Gruyter, vol. 11(3), pages 1-36, September.
- Falk, Armin & Kosfeld, Michael, 2003. "It's all about Connections: Evidence on Network Formation," IZA Discussion Papers 777, Institute for the Study of Labor (IZA).
- Falk, Armin & Kosfeld, Michael, 2003. "It's All About Connections: Evidence on Network Formation," CEPR Discussion Papers 3970, C.E.P.R. Discussion Papers.
- Bornhorst, Fabian & Ichino, Andrea & Schlag, Karl & Winter, Eyal, 2004. "Trust and Trustworthiness Among Europeans: South-North Comparison," CEPR Discussion Papers 4378, C.E.P.R. Discussion Papers.
- Fershtman, C. & Gneezy, U., 2000.
"Discrimination in a Segmented Society: an Experimental Approach,"
2000-9, Tel Aviv.
- Chaim Fershtman & Uri Gneezy, 2001. "Discrimination In A Segmented Society: An Experimental Approach," The Quarterly Journal of Economics, MIT Press, vol. 116(1), pages 351-377, February.
- Andreoni, James & Croson, Rachel, 2008.
"Partners versus Strangers: Random Rematching in Public Goods Experiments,"
Handbook of Experimental Economics Results,
- James Andreoni & Rachel Croson, 2001. "Partners versus Strangers: Random Rematching in Public Goods Experiments," Levine's Working Paper Archive 563824000000000132, David K. Levine.
- Andreoni,J. & Croson,R., 1998. "Partners versus strangers : random rematching in public goods experiments," Working papers 11, Wisconsin Madison - Social Systems.
- Stephen Leider & Markus M. Möbius & Tanya Rosenblat & Quoc-Anh Do, 2007. "Directed Altruism and Enforced Reciprocity in Social Networks: How Much is A Friend Worth?," NBER Working Papers 13135, National Bureau of Economic Research, Inc.
- Sanjeev Goyal & Sumit Joshi, 2000.
"Networks of Collaboration in Oligopoly,"
Tinbergen Institute Discussion Papers
00-092/1, Tinbergen Institute.
- Sumit Joshi, 2000. "Networks of Collaboration in Oligopoly," Econometric Society World Congress 2000 Contributed Papers 0623, Econometric Society.
- Goyal, S. & Joshi, S., 2000. "Networks of Collaboration in Oligopoly," Econometric Institute Research Papers EI 9952-/A, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
- Bohnet, Iris & Zeckhauser, Richard, 2004.
"Trust, risk and betrayal,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 55(4), pages 467-484, December.
- Alesina, Alberto F & La Ferrara, Eliana, 2000.
"Who Trusts Others?,"
CEPR Discussion Papers
2646, C.E.P.R. Discussion Papers.
- Edward L. Glaeser & David I. Laibson & José A. Scheinkman & Christine L. Soutter, 2000.
The Quarterly Journal of Economics,
MIT Press, vol. 115(3), pages 811-846, August.
- Bornhorst, Fabian & Ichino, Andrea & Kirchkamp, Oliver & Schlag, Karl H. & Winter, Eyal, 2004. "How do People Play a Repeated Trust Game? Experimental Evidence," Sonderforschungsbereich 504 Publications 04-43, Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim.
- 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.
- Berg Joyce & Dickhaut John & McCabe Kevin, 1995. "Trust, Reciprocity, and Social History," Games and Economic Behavior, Elsevier, vol. 10(1), pages 122-142, July.
- Eckel, Catherine C. & Grossman, Philip J., 2008. "Differences in the Economic Decisions of Men and Women: Experimental Evidence," Handbook of Experimental Economics Results, Elsevier.
- Matteo Galizzi & Michele Bernasconi, 2005. "Coordination in Networks Formation: Experimental Evidence on Learning and Salience," Working Papers 2005.107, Fondazione Eni Enrico Mattei.
- Mario Maggioni & Teodora Uberti, 2011. "Networks and geography in the economics of knowledge flows," Quality & Quantity: International Journal of Methodology, Springer, vol. 45(5), pages 1031-1051, August.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.