Trust, Reciprocity, and Guanxi in China: An Experimental Investigation
AbstractWe examine the influence of social distance on levels of trust and reciprocity in China. Social distance, reflected in the indigenous concept of guanxi, is of central importance to Chinese culture. In Study 1, some participants participated in two financially salient trust games to measure behavior, one with an anonymous classmate and the other with an anonymous, demographically identical nonclassmate. Other participants, drawn from the same population, completed hypothetical surveys to gauge both hypothetical behavior and expectations of others. Social distance effects on actual and hypothetical behavior were statistically consistent. The results together corroborated the hypothesized negative relationship between trust and social distance. However, reciprocity was not responsive to social distance. Study 2 found that affect-based trust, but not cognition-based trust, played a mediating role in the relationship between social distance and interpersonal trust in a hypothetical scenario. We conclude that close guanxi ties in China engender affect-based trust, which is extended to shouren classmates. This is true despite the fact that no more cognition-based trust is placed nor reciprocity received or expected from classmates compared to demographically identical shengren nonclassmates.
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Bibliographic InfoPaper provided by University of Guelph, Department of Economics and Finance in its series Working Papers with number 1204.
Length: 37 pages
Date of creation: 2012
Date of revision:
Experiment; Affect-based Trust; China; Guanxi; Reciprocity; Trust; Social Distance;
Find related papers by JEL classification:
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- D03 - Microeconomics - - General - - - Behavioral Economics; Underlying Principles
- D69 - Microeconomics - - Welfare Economics - - - Other
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-02-20 (All new papers)
- NEP-CBE-2012-02-20 (Cognitive & Behavioural Economics)
- NEP-EVO-2012-02-20 (Evolutionary Economics)
- NEP-EXP-2012-02-20 (Experimental Economics)
- NEP-GTH-2012-02-20 (Game Theory)
- NEP-NET-2012-02-20 (Network Economics)
- NEP-SOC-2012-02-20 (Social Norms & Social Capital)
- NEP-TRA-2012-02-20 (Transition Economics)
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