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Trust Games Measure Trust

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  • Houser, Daniel
  • Schunk, Daniel
  • Winter, Joachim

Abstract

The relationship between trust and risk is a topic of enduring interest. Although there are substantial differences between the ideas the terms express, many researchers from different disciplines have pointed out that these two concepts become very closely related in personal exchange contexts. This raises the important practical concern over whether behaviors in the widely-used "trust game" actually measure trust, or instead reveal more about risk attitudes. It is critical to confront this question rigorously, as data from these games are increasingly used to support conclusions from a wide variety of fields including macroeconomic development, social psychology and cultural anthropology. The aim of this paper is to provide cogent evidence on the relationship between trust and risk in "trust" games. Subjects in our experiment participate either in a trust game or in its risk game counterpart. In the trust version, subjects play a standard trust game and know their counterparts are human. In the risk version, subjects know their counterparts are computers making random decisions. We compare decisions between these treatments, and also correlate behavior with subjects’ risk attitudes as measured by the Holt and Laury (2002) risk instrument. We provide evidence that trusting behavior is different than behavior under risk. In particular, (i) decisions patterns in our trust and risk games are significantly different; and (ii) risk attitudes correlate with decisions in the risk game, but not the trust game.

Suggested Citation

  • Houser, Daniel & Schunk, Daniel & Winter, Joachim, 2006. "Trust Games Measure Trust," Discussion Papers in Economics 1350, University of Munich, Department of Economics.
  • Handle: RePEc:lmu:muenec:1350
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    File URL: https://epub.ub.uni-muenchen.de/1350/1/RandT_061217_DP.pdf
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    References listed on IDEAS

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    1. Daniel Houser & Michael Keane & Kevin McCabe, 2004. "Behavior in a Dynamic Decision Problem: An Analysis of Experimental Evidence Using a Bayesian Type Classification Algorithm," Econometrica, Econometric Society, vol. 72(3), pages 781-822, May.
    2. Bohnet, Iris & Zeckhauser, Richard, 2004. "Trust, risk and betrayal," Journal of Economic Behavior & Organization, Elsevier, pages 467-484.
    3. Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, pages 1644-1655.
    4. Edward L. Glaeser & David I. Laibson & José A. Scheinkman & Christine L. Soutter, 2000. "Measuring Trust," The Quarterly Journal of Economics, Oxford University Press, pages 811-846.
    5. Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde, 2012. "The Intergenerational Transmission of Risk and Trust Attitudes," Review of Economic Studies, Oxford University Press, pages 645-677.
    6. McCabe, Kevin & Houser, Daniel & Ryan, Lee & Smith, Vernon & Trouard, Ted, 2001. "A Functional Imaging Study of Cooperation in Two-Person reciprocal Exchange," MPRA Paper 5172, University Library of Munich, Germany.
    7. Edward L. Glaeser & David I. Laibson & José A. Scheinkman & Christine L. Soutter, 2000. "Measuring Trust," The Quarterly Journal of Economics, Oxford University Press, pages 811-846.
      • Glaeser, Edward Ludwig & Laibson, David I. & Scheinkman, Jose A. & Soutter, Christine L., 2000. "Measuring Trust," Scholarly Articles 4481497, Harvard University Department of Economics.
    8. 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.
    9. Berg Joyce & Dickhaut John & McCabe Kevin, 1995. "Trust, Reciprocity, and Social History," Games and Economic Behavior, Elsevier, vol. 10(1), pages 122-142, July.
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    Citations

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    Cited by:

    1. Daniel Ji & Pablo Guillen, 2010. "Trust, discrimination and acculturation Experimental evidence on Asian international and Australian domestic university students," ThE Papers 09/12, Department of Economic Theory and Economic History of the University of Granada..
    2. Jason Aimone & Daniel Houser, 2008. "What You Don't Know Won't Hurt You: A Laboratory Analysis of Betrayal Aversion," Working Papers 1008, George Mason University, Interdisciplinary Center for Economic Science, revised Sep 2008.
    3. Maroš Servátka & Steven Tucker & Radovan Vadovic, 2008. "Strategic Use of Trust," Working Papers in Economics 08/11, University of Canterbury, Department of Economics and Finance.
    4. Bonein, Aurélie & Serra, Daniel, 2009. "Gender pairing bias in trustworthiness," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(5), pages 779-789, October.
    5. Aimone, Jason A. & Houser, Daniel, 2013. "Harnessing the benefits of betrayal aversion," Journal of Economic Behavior & Organization, Elsevier, vol. 89(C), pages 1-8.
    6. Sacha Bourgeois-gironde & Anne Corcos, 2011. "Discriminating strategic reciprocity and acquired trust in the repeated trust-game," Economics Bulletin, AccessEcon, vol. 31(1), pages 177-188.
    7. Jason Aimone & Daniel Houser, 2012. "What you don’t know won’t hurt you: a laboratory analysis of betrayal aversion," Experimental Economics, Springer;Economic Science Association, vol. 15(4), pages 571-588, December.
    8. Guillen, Pablo & Ji, Daniel, 2011. "Trust, discrimination and acculturation," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(5), pages 594-608.
    9. Fetchenhauer, Detlef & Dunning, David, 2012. "Betrayal aversion versus principled trustfulness—How to explain risk avoidance and risky choices in trust games," Journal of Economic Behavior & Organization, Elsevier, vol. 81(2), pages 534-541.

    More about this item

    Keywords

    trust; risk attitudes; laboratory experiments;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior

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