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Trust and trustworthiness in networked exchange

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  • 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.

Suggested Citation

  • Cassar, Alessandra & Rigdon, Mary, 2011. "Trust and trustworthiness in networked exchange," Games and Economic Behavior, Elsevier, vol. 71(2), pages 282-303, March.
  • Handle: RePEc:eee:gamebe:v:71:y:2011:i:2:p:282-303
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    2. repec:kap:expeco:v:20:y:2017:i:2:d:10.1007_s10683-016-9488-x is not listed on IDEAS
    3. Matthias Wibral, 2015. "Identity changes and the efficiency of reputation systems," Experimental Economics, Springer;Economic Science Association, vol. 18(3), pages 408-431, September.
    4. Shu-Heng Chen & Bin-Tzong Chie & Tong Zhang, 2015. "Network-Based Trust Games: An Agent-Based Model," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 18(3), pages 1-5.
    5. Xiong, Hang & Payne, Diane & Kinsella, Stephen, 2016. "Peer effects in the diffusion of innovations: Theory and simulation," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 63(C), pages 1-13.
    6. Natalia Borzino & Enrique Fatas & Emmanuel Peterle, 2015. "In Gov we trust: Voluntary compliance in networked investment games," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 15-21, School of Economics, University of East Anglia, Norwich, UK..
    7. Glogowsky, Ulrich & Cagala, Tobias & Rincke, Johannes & Grimm, Veronika, 2014. "Cooperation and Trustworthiness in Repeated Interaction," Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100437, Verein für Socialpolitik / German Economic Association.
    8. Andrew Kloosterman, 2016. "Directed search with heterogeneous firms: an experimental study," Experimental Economics, Springer;Economic Science Association, vol. 19(1), pages 51-66, March.
    9. repec:eee:apmaco:v:330:y:2018:i:c:p:125-133 is not listed on IDEAS
    10. M. Bigoni & S. Bortolotti & M. Casari & D. Gambetta, 2012. "Trustworthy by Convention," Working Papers wp827, Dipartimento Scienze Economiche, Universita' di Bologna.
    11. Bauernschuster, Stefan & Falck, Oliver & Große, Niels, 2013. "When trustors compete for the favour of a trustee – A laboratory experiment," Journal of Economic Psychology, Elsevier, vol. 34(C), pages 133-147.
    12. repec:eee:jeborg:v:142:y:2017:i:c:p:320-330 is not listed on IDEAS
    13. Stefan Bauernschuster & Oliver Falck & Niels Große, 2010. "Can Competition Spoil Reciprocity? - A Laboratory Experiment," CESifo Working Paper Series 2923, CESifo Group Munich.
    14. Ramalingam, Abhijit & Rojo Arjona, David & Schram, Arthur & Van Leeuwen, Boris, 2015. "Authority and Centrality: Power and Cooperation in Social Dilemma Networks," IAST Working Papers 15-23, Institute for Advanced Study in Toulouse (IAST).
    15. Tobias Cagala & Ulrich Glogowsky & Veronika Grimm & Johannes Rincke, 2017. "Public Goods Provision with Rent-Extracting Administrators," CESifo Working Paper Series 6801, CESifo Group Munich.
    16. 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.

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