On pledging one's trustworthiness through gifts: an experimental inquiry

The anthropological literature provides many instances of tokens donated in the form of a gift to woo potential trade partners, or to strengthen ties to existing partners. We study the role of gifts, as pledges of one’s trustworthiness, through an experiment modeled on the trust game. We vary whether the trustee can send a token before the trustor decides whether to transfer money; whether one of the tokens is socially positioned; and whether the participants interact repeatedly or are randomly re-matched in each round. Participants in a fixed matching achieve comparable levels of trust and trustworthiness in the studies with and without tokens. In the studies with a token, trustors send significantly more points when the trustee has sent a token. A token is used more sparingly after it is socially positioned. We conclude that for institutional design, the time horizon of the relationship might be at least as important as the ability to make pledges.