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Intentions and Consequences An Experimental Investigation of Trust and Reciprocity Determinants

Author

Listed:
  • Werner Güth

    (Max Planck Institute of Economics, Strategic Interaction Group)

  • Harriet Mugera

    (School of Social Sciences, University of Trento, Italy)

  • Andrew Musau

    (School of Social Sciences, University of Trento, Italy; Faculty of Economics and Social Sciences, University of Agder, Norway)

  • Matteo Ploner

    (Cognitive and Experimental Economics Laboratory, University of Trento, Italy)

Abstract

We experimentally manipulate the efficiency of trust and reciprocity in a modified Investment Game. The aim of our manipulation is to test whether reciprocity is mainly affected by payoff consequences of trust or by intentions underlying it. We find that intentions matter and that consequences have an asymmetric impact: trustees reward trust more when trust is more efficient but do not adjust rewards to the efficiency of their own actions. As a result, profitability of trust is fostered by efficiency of trust as well as by efficiency of reciprocity. However, trustors do not fully exploit the high efficiency gains offered by investments and display only moderate trust.

Suggested Citation

  • Werner Güth & Harriet Mugera & Andrew Musau & Matteo Ploner, 2012. "Intentions and Consequences An Experimental Investigation of Trust and Reciprocity Determinants," Jena Economics Research Papers 2012-029, Friedrich-Schiller-University Jena.
    • Handle: RePEc:jrp:jrpwrp:2012-029
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    References listed on IDEAS

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    Cited by:

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    6. Eric Cardella, 2016. "Exploiting the guilt aversion of others: do agents do it and is it effective?," Theory and Decision, Springer, vol. 80(4), pages 523-560, April.

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    More about this item

    Keywords

    trust and reciprocity; other-regarding preference; experiment;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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