Is Trust a Bad Investment?
Abstract
This paper examines whether trust is an investment decision under uncertainty, based on the expectation of trustworthiness, and whether trustworthiness is reciprocity, conditional on one?s counterpart?s behavior. In trust experiments in Russia, South Africa and the United States, two thirds of the subjects who trust do not expect trust to pay monetarily. We find substantial heterogeneity in motivation: Expectations of return account for most of women?s trust, and reciprocity for most of Americans? trustworthiness. Men?s trust and Russians? and South Africans? trustworthiness are significantly related to unconditional kindness as measured by subjects? behavior in dictator games, us ing a within-subject design.Download Info
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Paper provided by Center for Research in Economics, Management and the Arts (CREMA) in its series CREMA Working Paper Series with number 2004-07.Length:
Date of creation: May 2004
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Handle: RePEc:cra:wpaper:2004-07
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Keywords: Trust; kindness; reciprocity; gender; cross-cultural experiments.;Other versions of this item:
- Ashraf, Nava & Bohnet, Iris & Piankov, Nikita, 2003. "Is Trust a Bad Investment?," Working Paper Series rwp03-047, Harvard University, John F. Kennedy School of Government.
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-06-05 (All new papers)
- NEP-BEC-2005-06-05 (Business Economics)
- NEP-CBE-2005-06-05 (Cognitive & Behavioural Economics)
- NEP-EXP-2005-06-05 (Experimental Economics)
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