IDEAS home Printed from https://ideas.repec.org/a/eee/jeborg/v62y2007i2p272-292.html
   My bibliography  Save this article

Traditional trust measurement and the risk confound: An experiment in rural Paraguay

Author

Listed:
  • Schechter, Laura

Abstract

Play in the traditional trust experiment depends both on trust beliefs and on levels of risk aversion. We ran two experiments with a diverse set of subjects in fifteen villages of rural Paraguay, the traditional trust experiment and a new experiment measuring only risk aversion. We find that risk attitudes are highly predictive of play in the trust game. In addition, omitting risk aversion as a regressor in trust regressions signficiantly changes the coefficients of important explanatory variables such as gender and wealth. We also use data on income and bet choice to calculate players' coefficients of relative risk aversion.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Schechter, Laura, 2007. "Traditional trust measurement and the risk confound: An experiment in rural Paraguay," Journal of Economic Behavior & Organization, Elsevier, vol. 62(2), pages 272-292, February.
  • Handle: RePEc:eee:jeborg:v:62:y:2007:i:2:p:272-292
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0167-2681(05)00250-7
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Stephen Knack & Philip Keefer, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(4), pages 1251-1288.
    2. Cox, James C., 2004. "How to identify trust and reciprocity," Games and Economic Behavior, Elsevier, vol. 46(2), pages 260-281, February.
    3. La Porta, Rafael, et al, 1997. "Trust in Large Organizations," American Economic Review, American Economic Association, vol. 87(2), pages 333-338, May.
    4. repec:pri:rpdevs:gamespaper.pdf is not listed on IDEAS
    5. Chaudhuri, Ananish & Gangadharan, Lata, 2003. "Gender Differences in Trust and Reciprocity," Working Papers 136, Department of Economics, The University of Auckland.
    6. 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.
    7. Narayan, Deepa & Pritchett, Lant, 1999. "Cents and Sociability: Household Income and Social Capital in Rural Tanzania," Economic Development and Cultural Change, University of Chicago Press, vol. 47(4), pages 871-897, July.
    8. Dean S. Karlan, 2005. "Using Experimental Economics to Measure Social Capital and Predict Financial Decisions," American Economic Review, American Economic Association, vol. 95(5), pages 1688-1699, December.
    9. Carter, Michael R. & Castillo, Marco, 2003. "An Experimental Approach to Social Capital in South Africa," Staff Paper Series 448, University of Wisconsin, Agricultural and Applied Economics.
    10. Abigail Barr, 2003. "Trust and expected trustworthiness: experimental evidence from zimbabwean villages," Economic Journal, Royal Economic Society, vol. 113(489), pages 614-630, July.
    11. Berg Joyce & Dickhaut John & McCabe Kevin, 1995. "Trust, Reciprocity, and Social History," Games and Economic Behavior, Elsevier, vol. 10(1), pages 122-142, July.
    12. James Andreoni & Marco Castillo & Ragan Petrie, 2003. "What Do Bargainers' Preferences Look Like? Experiments with a Convex Ultimatum Game," American Economic Review, American Economic Association, vol. 93(3), pages 672-685, June.
    13. Eckel, Catherine C. & Wilson, Rick K., 2004. "Is trust a risky decision?," Journal of Economic Behavior & Organization, Elsevier, vol. 55(4), pages 447-465, December.
    14. Glenn W. Harrison & Eric Johnson & Melayne M. McInnes & E. Elisabet Rutström, 2005. "Risk Aversion and Incentive Effects: Comment," American Economic Review, American Economic Association, vol. 95(3), pages 897-901, June.
    15. James Andreoni & John Miller, 2002. "Giving According to GARP: An Experimental Test of the Consistency of Preferences for Altruism," Econometrica, Econometric Society, vol. 70(2), pages 737-753, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Juan Camilo Cardenas & Jeffrey P. Carpenter, 2005. "Experiments and Economic Development: Lessons from Field Labs in the Developing World," Middlebury College Working Paper Series 0505, Middlebury College, Department of Economics.
    2. Rahul Mehrotra & Vincent Somville & Lore vandewalle, 2016. "Increasing trust in the bank to enhance savings: Experimental evidence from India," CMI Working Papers 1, CMI (Chr. Michelsen Institute), Bergen, Norway.
    3. 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.
    4. Alvin Etang & David Fielding & Stephen Knowles, 2011. "Does trust extend beyond the village? Experimental trust and social distance in Cameroon," Experimental Economics, Springer;Economic Science Association, vol. 14(1), pages 15-35, March.
    5. Bohnet, Iris & Zeckhauser, Richard, 2004. "Trust, risk and betrayal," Journal of Economic Behavior & Organization, Elsevier, vol. 55(4), pages 467-484, December.
    6. Tu, Qin & Bulte, Erwin, 2010. "Trust, Market Participation and Economic Outcomes: Evidence from Rural China," World Development, Elsevier, vol. 38(8), pages 1179-1190, August.
    7. Bouma, Jetske & Bulte, Erwin & van Soest, Daan, 2008. "Trust and cooperation: Social capital and community resource management," Journal of Environmental Economics and Management, Elsevier, vol. 56(2), pages 155-166, September.
    8. Omar Sene, 2012. "Trust as a Proxy for the Ability to Produce Local Public Goods: Testing Different Measures," Documents de travail du Centre d'Economie de la Sorbonne 12041, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    9. Ernst Fehr, 2009. "On The Economics and Biology of Trust," Journal of the European Economic Association, MIT Press, vol. 7(2-3), pages 235-266, 04-05.
    10. Houser, Daniel & Schunk, Daniel & Winter, Joachim, 2010. "Distinguishing trust from risk: An anatomy of the investment game," Journal of Economic Behavior & Organization, Elsevier, vol. 74(1-2), pages 72-81, May.
    11. Delavande, Adeline & Zafar, Basit, 2015. "Stereotypes and Madrassas: Experimental evidence from Pakistan," Journal of Economic Behavior & Organization, Elsevier, vol. 118(C), pages 247-267.
    12. Ciriolo, Emanuele, 2007. "Inequity aversion and trustees' reciprocity in the trust game," European Journal of Political Economy, Elsevier, vol. 23(4), pages 1007-1024, December.
    13. Johansson-Stenman, Olof & Mahmud, Minhaj & Martinsson, Peter, 2013. "Trust, trust games and stated trust: Evidence from rural Bangladesh," Journal of Economic Behavior & Organization, Elsevier, vol. 95(C), pages 286-298.
    14. Chaudhuri, Ananish & Li, Yaxiong & Paichayontvijit, Tirnud, 2016. "What’s in a frame? Goal framing, trust and reciprocity," Journal of Economic Psychology, Elsevier, vol. 57(C), pages 117-135.
    15. Cox, James C. & Kerschbamer, Rudolf & Neururer, Daniel, 2016. "What is trustworthiness and what drives it?," Games and Economic Behavior, Elsevier, vol. 98(C), pages 197-218.
    16. James Andreoni, 2018. "Satisfaction Guaranteed: When Moral Hazard Meets Moral Preferences," American Economic Journal: Microeconomics, American Economic Association, vol. 10(4), pages 159-189, November.
    17. Kim, Byung-Yeon & Choi, Syngjoo & Lee, Jungmin & Lee, Sokbae & Choi, Kyunghui, 2017. "Do Institutions Affect Social Preferences? Evidence from Divided Korea," Journal of Comparative Economics, Elsevier, vol. 45(4), pages 865-888.
    18. Juan Camilo Cardenas & Jeffrey Carpenter, 2008. "Behavioural Development Economics: Lessons from Field Labs in the Developing World," Journal of Development Studies, Taylor & Francis Journals, vol. 44(3), pages 311-338.
    19. Breuer, Janice Boucher & McDermott, John, 2009. "Trust and the Distribution of Caution," MPRA Paper 18112, University Library of Munich, Germany.
    20. Arnstein Aassve & Pierluigi Conzo & Francesco Mattioli, 2021. "Was Banfield right? New insights from a nationwide laboratory experiment," Journal of Regional Science, Wiley Blackwell, vol. 61(5), pages 1029-1064, November.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jeborg:v:62:y:2007:i:2:p:272-292. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jebo .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.