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What is trustworthiness and what drives it?

Author

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  • 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?," Working Papers 2014-23, Faculty of Economics and Statistics, Universität Innsbruck.
    • Handle: RePEc:inn:wpaper:2014-23
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    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.

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    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

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