IDEAS home Printed from https://ideas.repec.org/p/exc/wpaper/2014-06.html
   My bibliography  Save this paper

What is Trustworthiness and What Drives It?

Author

Listed:
  • James C. Cox
  • Rudolf Kerschbamer
  • Daniel Neururer

Abstract

This paper reports the results of experiments designed to isolate the impact of various combinations of the following motives on trustworthiness: (i) unconditional other-regarding preferences -- like altruism, inequality aversion, quasi-maximin, etc.; (ii) deal-responsiveness -- reacting to actions that allow for a mutual improvement by adopting behavior that implies a mutual improvement; (iii) gift-responsiveness -- reacting to choices that allow the trustee to obtain an improvement by adopting actions that benefit the trustor; and (iv) vulnerability-responsiveness -- reacting to the vulnerability of the trustor by adopting actions that do not hurt the trustor. Our results indicate that -- besides unconditional other-regarding preferences -- vulnerability-responsiveness is an important determinant of trustworthiness even in cases where the vulnerability of the trustor does not come together with a gift to the trustee. Motivated by our empirical findings we provide formal definitions of trust and trustworthiness based on revealed willingness to accept vulnerability and the response to it.

Suggested Citation

  • James C. Cox & Rudolf Kerschbamer & Daniel Neururer, 2014. "What is Trustworthiness and What Drives It?," Experimental Economics Center Working Paper Series 2014-06, Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University, revised Nov 2005.
    • Handle: RePEc:exc:wpaper:2014-06
    as

    Download full text from publisher

    File URL: http://excen.gsu.edu/workingpapers/GSU_EXCEN_WP_2014-06.pdf
    File Function: First version, 2014
    Download Restriction: no
    File URL: http://excen.gsu.edu/workingpapers/GSU_EXCEN_WP_2016-03.pdf
    File Function: Revised version, 2016
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Hoffman Elizabeth & McCabe Kevin & Shachat Keith & Smith Vernon, 1994. "Preferences, Property Rights, and Anonymity in Bargaining Games," Games and Economic Behavior, Elsevier, vol. 7(3), pages 346-380, November.
    2. 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.
    3. James C. Cox & Vjollca Sadiraj, 2012. "Direct Tests Of Individual Preferences For Efficiency And Equity," Economic Inquiry, Western Economic Association International, vol. 50(4), pages 920-931, October.
    4. 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.
    5. Cox, James C., 2004. "How to identify trust and reciprocity," Games and Economic Behavior, Elsevier, vol. 46(2), pages 260-281, February.
    6. La Porta, Rafael, et al, 1997. "Trust in Large Organizations," American Economic Review, American Economic Association, vol. 87(2), pages 333-338, May.
    7. repec:pri:rpdevs:gamespaper.pdf is not listed on IDEAS
    8. Andreoni, James & Petrie, Ragan, 2004. "Public goods experiments without confidentiality: a glimpse into fund-raising," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1605-1623, July.
    9. Johnson, Noel D. & Mislin, Alexandra A., 2011. "Trust games: A meta-analysis," Journal of Economic Psychology, Elsevier, vol. 32(5), pages 865-889.
    10. Teck-Hua Ho & Keith Weigelt, 2005. "Trust Building Among Strangers," Management Science, INFORMS, vol. 51(4), pages 519-530, April.
    11. 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.
    12. James Cox & Klarita Sadiraj & Vjollca Sadiraj, 2008. "Implications of trust, fear, and reciprocity for modeling economic behavior," Experimental Economics, Springer;Economic Science Association, vol. 11(1), pages 1-24, March.
    13. James C. Cox & Daniel Friedman & Vjollca Sadiraj, 2008. "Revealed Altruism," Econometrica, Econometric Society, vol. 76(1), pages 31-69, January.
    14. Iris Bohnet & Fiona Greig & Benedikt Herrmann & Richard Zeckhauser, 2008. "Betrayal Aversion: Evidence from Brazil, China, Oman, Switzerland, Turkey, and the United States," American Economic Review, American Economic Association, vol. 98(1), pages 294-310, March.
    15. Ben-Ner, Avner & Putterman, Louis, 2009. "Trust, communication and contracts: An experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 70(1-2), pages 106-121, May.
    16. 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.
    17. Ben Greiner, 2004. "The Online Recruitment System ORSEE 2.0 - A Guide for the Organization of Experiments in Economics," Working Paper Series in Economics 10, University of Cologne, Department of Economics.
    18. James Andreoni & B. Douglas Bernheim, 2009. "Social Image and the 50-50 Norm: A Theoretical and Experimental Analysis of Audience Effects," Econometrica, Econometric Society, vol. 77(5), pages 1607-1636, September.
    19. Andrew Schotter & Barry Sopher, 2006. "Trust and trustworthiness in games: An experimental study of intergenerational advice," Experimental Economics, Springer;Economic Science Association, vol. 9(2), pages 123-145, June.
    20. Edward Lorenz, 1988. "Neither Friends nor Strangers," Post-Print halshs-00483728, HAL.
    21. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2008. "Trusting the Stock Market," Journal of Finance, American Finance Association, vol. 63(6), pages 2557-2600, December.
    22. Edward L. Glaeser & David Laibson & Jose A. Scheinkman & Christine L. Soutter, 1999. "What is Social Capital? The Determinants of Trust and Trustworthiness," NBER Working Papers 7216, National Bureau of Economic Research, Inc.
    23. Offerman, Theo, 2002. "Hurting hurts more than helping helps," European Economic Review, Elsevier, vol. 46(8), pages 1423-1437, September.
    24. Berg Joyce & Dickhaut John & McCabe Kevin, 1995. "Trust, Reciprocity, and Social History," Games and Economic Behavior, Elsevier, vol. 10(1), pages 122-142, July.
    25. Gary Charness, 2004. "Attribution and Reciprocity in an Experimental Labor Market," Journal of Labor Economics, University of Chicago Press, vol. 22(3), pages 665-688, July.
    26. John A. List, 2007. "On the Interpretation of Giving in Dictator Games," Journal of Political Economy, University of Chicago Press, vol. 115(3), pages 482-493.
    27. Bohnet, Iris & Zeckhauser, Richard, 2004. "Trust, risk and betrayal," Journal of Economic Behavior & Organization, Elsevier, vol. 55(4), pages 467-484, December.
    28. Nancy Buchan & Rachel Croson, 1999. "Gender and Culture: International Experimental Evidence from Trust Games," American Economic Review, American Economic Association, vol. 89(2), pages 386-391, May.
    29. Yola Engler & Rudolf Kerschbamer & Lionel Page, 2018. "Why did he do that? Using counterfactuals to study the effect of intentions in extensive form games," Experimental Economics, Springer;Economic Science Association, vol. 21(1), pages 1-26, March.
    30. Donald L. Ferrin & Kurt T. Dirks, 2003. "The Use of Rewards to Increase and Decrease Trust: Mediating Processes and Differential Effects," Organization Science, INFORMS, vol. 14(1), pages 18-31, February.
    31. Yola Engler & Rudolf Kerschbamer & Lionel Page, 2018. "Why did he do that? Using counterfactuals to study the effect of intentions in extensive form games," Experimental Economics, Springer;Economic Science Association, vol. 21(1), pages 1-26, March.
    32. Ben Greiner, 2004. "The Online Recruitment System ORSEE - A Guide for the Organization of Experiments in Economics," Papers on Strategic Interaction 2003-10, Max Planck Institute of Economics, Strategic Interaction Group.
    33. James C. Cox & Cary A. Deck, 2005. "On the Nature of Reciprocal Motives," Economic Inquiry, Western Economic Association International, vol. 43(3), pages 623-635, July.
    34. repec:pri:rpdevs:gamespaper is not listed on IDEAS
    35. Ananish Chaudhuri & Lata Gangadharan, 2007. "An Experimental Analysis of Trust and Trustworthiness," Southern Economic Journal, John Wiley & Sons, vol. 73(4), pages 959-985, April.
    36. Michael Bacharach & Gerardo Guerra & Daniel Zizzo, 2007. "The Self-Fulfilling Property of Trust: An Experimental Study," Theory and Decision, Springer, vol. 63(4), pages 349-388, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Calabuig, Vicente & Fatas, Enrique & Olcina, Gonzalo & Rodriguez-Lara, Ismael, 2016. "Carry a big stick, or no stick at all," Journal of Economic Psychology, Elsevier, vol. 57(C), pages 153-171.
    2. Yola Engler & Rudolf Kerschbamer & Lionel Page, 2018. "Why did he do that? Using counterfactuals to study the effect of intentions in extensive form games," Experimental Economics, Springer;Economic Science Association, vol. 21(1), pages 1-26, March.
    3. Lorna Zischka & Marina Della Giusta, 2016. "Helping without Trusting: Disentangling Prosocial Behaviours," Economics Discussion Papers em-dp2016-11, Department of Economics, University of Reading.
    4. Anass YACHOULTI, 2017. "La confiance au sein des organisations : Apport conceptuel," Journal of Academic Finance, RED research unit, university of Gabes, Tunisia, vol. 8(1), June.
    5. Jing Liu & Anthony Meder & Steven T. Schwartz & Richard A. Young, 2022. "Whither the hidden returns to control: A short research paper," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(8), pages 3361-3369, December.
    6. Füllbrunn, Sascha & Vyrastekova, Jana, 2023. "Does trust break even? A trust-game experiment with negative endowments," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 103(C).
    7. Hernán Bejarano & Joris Gillet & Ismael Rodriguez‐Lara, 2018. "Do Negative Random Shocks Affect Trust and Trustworthiness?," Southern Economic Journal, John Wiley & Sons, vol. 85(2), pages 563-579, October.
    8. Attanasi, Giuseppe & Rimbaud, Claire & Villeval, Marie Claire, 2023. "Guilt aversion in (new) games: Does partners' payoff vulnerability matter?," Games and Economic Behavior, Elsevier, vol. 142(C), pages 690-717.
    9. Giuseppe Attanasi & Claire Rimbaud & Marie-Claire Villeval, 2020. "Guilt Aversion in (New) Games: the Role of Vulnerability," GREDEG Working Papers 2020-15, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    10. Ismael Rodriguez-Lara, 2018. "No evidence of inequality aversion in the investment game," PLOS ONE, Public Library of Science, vol. 13(10), pages 1-16, October.
    11. Nikoloz Kudashvili & Philipp Lergetporer, 2019. "Do Minorities Misrepresent Their Ethnicity to Avoid Discrimination?," CERGE-EI Working Papers wp644, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    12. repec:hal:wpaper:halshs-03620418 is not listed on IDEAS
    13. Yola Engler & Rudolf Kerschbamer & Lionel Page, 2018. "Why did he do that? Using counterfactuals to study the effect of intentions in extensive form games," Experimental Economics, Springer;Economic Science Association, vol. 21(1), pages 1-26, March.
    14. Giuseppe Danese & Luigi Mittone, 2020. "On pledging one's trustworthiness through gifts: an experimental inquiry," CEEL Working Papers 2001, Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia.
    15. Anass YACHOULTI, 2017. "La confiance au sein des organisations : Apport conceptuel," Journal of Academic Finance, RED research unit, university of Gabes, Tunisia, vol. 8(1), June.
    16. Bejarano, Hernan & Gillet, Joris & Lara, Ismael Rodríguez, 2021. "When the rich do (not) trust the (newly) rich: Experimental evidence on the effects of positive random shocks in the trust game," OSF Preprints wmejt, Center for Open Science.
    17. repec:cup:judgdm:v:17:y:2022:i:5:p:1123-1145 is not listed on IDEAS
    18. Sylvain Mignot & Annick Vignes, 2019. "Trust somebody but choose carefully : an empirical analysis of social relationships on an exchange market," Working Papers hal-02005026, HAL.
    19. Kudashvili, Nikoloz & Lergetporer, Philipp, 2022. "Minorities’ strategic response to discrimination: Experimental evidence," Journal of Public Economics, Elsevier, vol. 208(C).
    20. Ellingsen, Tore & Mohlin, Erik, 2019. "Decency," Working Papers 2019:3, Lund University, Department of Economics.
    21. Vernon L. Smith, 2018. "Adam Smith, scientist and evolutionist: modelling other-regarding behavior without social preferences," Journal of Bioeconomics, Springer, vol. 20(1), pages 7-21, April.
    22. repec:jdm:journl:v:17:y:2022:i:5:p:1123-1145 is not listed on IDEAS
    23. Rodriguez-lara, Ismael, 2015. "Equal distribution or equal payoffs? Reciprocity and inequality aversion in the investment game," MPRA Paper 63313, University Library of Munich, Germany.
    24. Gross, Till & Servátka, Maroš & Vadovič, Radovan, 2019. "Sequential vs. Simultaneous Trust," MPRA Paper 96343, University Library of Munich, Germany.

    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. 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.
    2. 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.
    3. Bejarano, Hernán & Gillet, Joris & Rodriguez-Lara, Ismael, 2021. "Trust and trustworthiness after negative random shocks," Journal of Economic Psychology, Elsevier, vol. 86(C).
    4. Kamas, Linda & Preston, Anne, 2012. "Distributive and reciprocal fairness: What can we learn from the heterogeneity of social preferences?," Journal of Economic Psychology, Elsevier, vol. 33(3), pages 538-553.
    5. Daniel Woods & Maroš Servátka, 2019. "Nice to you, nicer to me: Does self-serving generosity diminish the reciprocal response?," Experimental Economics, Springer;Economic Science Association, vol. 22(2), pages 506-529, June.
    6. Guiso, Luigi & Zingales, Luigi & Sapienza, Paola, 2010. "Civic Capital as the Missing Link," CEPR Discussion Papers 7757, C.E.P.R. Discussion Papers.
    7. Luo, Jun & Wang, Xinxin, 2020. "Hukou identity and trust—Evidence from a framed field experiment in China," China Economic Review, Elsevier, vol. 59(C).
    8. 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.
    9. Cassar, Alessandra & Rigdon, Mary, 2011. "Trust and trustworthiness in networked exchange," Games and Economic Behavior, Elsevier, vol. 71(2), pages 282-303, March.
    10. 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.
    11. Banuri’s, Sheheryar & de Oliveira, Angela C.M. & Eckel, Catherine C., 2019. "Care provision: An experimental investigation," Journal of Economic Behavior & Organization, Elsevier, vol. 157(C), pages 615-630.
    12. Kerschbamer, Rudolf, 2015. "The geometry of distributional preferences and a non-parametric identification approach: The Equality Equivalence Test," European Economic Review, Elsevier, vol. 76(C), pages 85-103.
    13. Sylvain Mignot & Annick Vignes, 2019. "Trust somebody but choose carefully : an empirical analysis of social relationships on an exchange market," Working Papers hal-02005026, HAL.
    14. Avtonomov, Y. & Elizarova, E., 2016. "Trust, Expectations and Optimism Bias: an Experimental Study," Journal of the New Economic Association, New Economic Association, vol. 29(1), pages 27-53.
    15. Maroš Servátka & Steven Tucker & Radovan Vadovič, 2011. "Building Trust—One Gift at a Time," Games, MDPI, vol. 2(4), pages 1-22, September.
    16. 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.
    17. Kerschbamer, Rudolf & Neururer, Daniel & Gruber, Alexander, 2019. "Do altruists lie less?," Journal of Economic Behavior & Organization, Elsevier, vol. 157(C), pages 560-579.
      • Rudolf Kerschbamer & Daniel Neururer & Alexander Gruber, 2017. "Do the altruists lie less?," Working Papers 2017-18, Faculty of Economics and Statistics, Universität Innsbruck, revised 09 Nov 2017.
    18. Murnighan, J. Keith & Wang, Long, 2016. "The social world as an experimental game," Organizational Behavior and Human Decision Processes, Elsevier, vol. 136(C), pages 80-94.
    19. Buchan, Nancy R. & Johnson, Eric J. & Croson, Rachel T.A., 2006. "Let's get personal: An international examination of the influence of communication, culture and social distance on other regarding preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 60(3), pages 373-398, July.
    20. Johnson, Noel D. & Mislin, Alexandra A., 2011. "Trust games: A meta-analysis," Journal of Economic Psychology, Elsevier, vol. 32(5), pages 865-889.

    More about this item

    Keywords

    trustworthiness; trust; trust game; investment game; deal-responsiveness; gift-responsiveness; vulnerability-responsiveness; generosity; reciprocity;
    All these keywords.

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:exc:wpaper:2014-06. 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: J. Todd Swarthout (email available below). General contact details of provider: https://edirc.repec.org/data/exgsuus.html .

    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.