TRUST,RECIPROCITY, AND RULES

Many economic interactions rely on trust and trust violations can have serious economic consequences. Simple minimum standard rules are attractive because they prevent egregious trust violations. However, they may undermine more trusting and reciprocal (trustworthy) behavior that otherwise would have occurred, leading to worse outcomes. In an experimental trust game, we test the efficacy of exogenously imposed minimum standard rules. Rules damage trust and reciprocity, reducing economic welfare. While sufficiently restrictive rules restore welfare, trust and reciprocity never return. Results indicate that participants are concerned about payoffs while also using the game to learn about trust and trustworthiness of others. (JEL C72, C90, D63, D64, L51)     

Race and the beauty premium: Mechanical Turk workers’ evaluations of Twitter accounts

ABSTRACT

Race, gender, and physical attractiveness strongly affect perceptions of trustworthiness and subsequent face-to-face interactions. This study examines how social media users’ perceived gender, race, and physical attractiveness can impact their standing online. We test these broad hypotheses by having Amazon Mechanical Turk (MTurk) workers evaluate a sample of 816 Twitter accounts. Our results show a ‘beauty premium,’ where MTurk workers say they are more likely to follow Twitter accounts with attractive pro?le photos, and attractive photos are positively associated with evaluations of trust. However, very attractive Black male and female Twitter accounts are associated with lower evaluations of trust compared to their White counterparts. These findings suggest that social media users’ social characteristics, perceived from their username or profile image, can replicate offline inequality online.     

Carry a big stick,or no stick at all: Punishment and endowment heterogeneity in the trust game

We investigate the effect of costly punishment in a trust game with endowment heterogeneity. Our findings indicate that the difference between the investor and the allocator’s initial endowments determines the effect of punishment on trust and trustworthiness. Punishment fosters trust only when the investor is wealthier than the allocator. Otherwise, punishment fails to promote trusting behavior. As for trustworthiness, the effect is just the opposite. The higher the difference between the investor and the allocator’s initial endowments, the less willing allocators are to pay back. We discuss the consistency of our findings with social preference models (like inequality aversion, reciprocity), the capacity of punishment (i.e., the deterrence hypothesis) and hidden costs of punishment (i.e., models of intrinsic and extrinsic motivation). Our results are hardly coherent with the first two (inequality aversion and deterrence), but roughly consistent with the latter.     

Gender,relationship stage,and sexual behavior: The importance of partner emotional investment within specific situations

This study examined the relationship of type of sexually instigating situation (partner behavior conveying emotional investment or not), relationship stage, and gender to self‐reported likelihood of engaging in sexual behavior. Participants (200 female and 122 male college students) read scenarios describing partner behavior in eight hypothetical sexual situations. Five of the sexual situations were proposed to explicitly communicate a sense of emotional investment in the relationship, and three other scenarios were conceived as not explicitly conveying emotional investment. Emotional investment situations were hypothesized to influence likelihood ratings as a function of imagined relationship stage (dating or in a serious relationship), manipulated across participants. Situations not conveying investment were hypothesized to influence ratings as afiinction of both relationship stage and gender. In large part, hypotheses were confirmed. The few exceptions were consistent with other gender‐role considerations related to trust and power.     

What happens if you single out? An experiment

We present an experiment investigating the effects of singling out an individual on trust and trustworthiness. We find that (a) trustworthiness falls if there is a singled out subject; (b) non-singled out subjects discriminate against the singled out subject when they are not responsible of the distinct status of this person; (c) under a negative frame, the singled out subject returns significantly less; (d) under a positive frame, the singled out subject behaves bimodally, either selecting very low or very high return rates. Overall, singling out induces a negligible effect on trust but is potentially disruptive for trustworthiness.     

Gender,relationship stage,and sexual behavior: the importance of partner emotional investment within specific situations

This study examined the relationship of type of sexually instigating situation (partner behavior conveying emotional investment or not), relationship stage, and gender to self-reported likelihood of engaging in sexual behavior. Participants (200 female and 122 male college students) read scenarios describing partner behavior in eight hypothetical sexual situations. Five of the sexual situations were proposed to explicitly communicate a sense of emotional investment in the relationship, and three other scenarios were conceived as not explicitly conveying emotional investment. Emotional investment situations were hypothesized to influence likelihood ratings as a function of imagined relationship stage (dating or in a serious relationship), manipulated across participants. Situations not conveying investment were hypothesized to influence ratings as a function of both relationship stage and gender. In large part, hypotheses were confirmed. The few exceptions were consistent with other gender-role considerations related to trust and power.     

Interpersonal trust in GermanCzech work relations: Mutual expectations and suggestions for improvement

Abstract

Issues of trust have received much attention of researchers of multiple disciplines. Growing interest can be seen on how culture and trust are interrelated and what trust means for intercultural work relations. In this study, trust and trustworthiness are analyzed between Czech and German employees and managers through a qualitative and a quantitative approach. First, we focus on the question if cultural differences exist in the process of evaluating the trustworthiness of another person (implicit trust theory), and which specific actions are (not) considered trustworthy behaviour on both sides. Second, the relevance and degree of perceived trustworthiness between Czechs and Germans within the business context is explored. Finally, suggestions by practitioners for successful trust development are described. The results show that abstract categories of trustworthiness (e.g. reliability) are similar on the German and the Czech side, but the reported signals and actions are somewhat different. Perceived trustworthiness was found to be significantly related to the satisfaction with the co-operation.     

Adolescents gradually improve at detecting trustworthiness from the facial features of unknown adults

People can (to some extent) detect trustworthiness from the facial features of social partners, and populations which underperform at this task are at a greater risk of abuse. Here we focus on situations in which adolescents make a decision whether to trust an unknown adult. Adolescents aged 13–18 (N = 540) played a trust game, in which they made decisions whether to trust unknown adults based on their picture. We show that trusting decisions become increasingly accurate with age, from a small effect size at age 13 to an effect size 2.5 times larger at age 18. We consider the implications of this result for the development of prosociality and the possible mechanisms underlying the development of trustworthiness detection from faces.     

What is Trust? A Multidisciplinary Review,Critique, and Synthesis

Despite decades of interdisciplinary research on trust, the literature remains fragmented and balkanized with little consensus regarding its origins. This review documents how this came to be and attempts to offer a solution. Specifically, it evaluates issues of conceptualization found in the trust literature. I recommend that we move away from varieties of trust – multidimensional conceptualizations of trust – and toward a single trust concept built around four essential properties: actor A's beliefs, actor B's trustworthiness, the matter(s) at hand, and unknown outcomes. I finish the article by proposing a synthetic structural‐cognitive theoretical framework for investigating the causes and consequences of trust in everyday life.     

Risk mitigation and trust: Experimental Evidence from Jordan and the United States

This paper examines how trust and trustworthiness respond to lowering the principal’s risk in cultural settings focused on risk mitigation vs. risk prevention. We employ a binary-choice trust game and show that principals are confronted with a complex optimization problem: risk mitigation lowers the principal’s cost of betrayal but if agents are inequality averse or reciprocally minded, it can also increase its likelihood. This may be exacerbated in cultures not used to fostering trust by risk mitigation. Our experiments suggest that lowering risk only increases trust in the United States but not in Jordan. In both countries, trustworthiness decreases as the principal’s vulnerability decreases. We extend our findings to naturally occurring vulnerabilities in addition to the financial ones created in the laboratory.     

TRUST,TRUSTWORTHINESS, AND BUSINESS SUCCESS: LAB AND FIELD FINDINGS FROM ENTREPRENEURS

This article contributes to the literature on trust and small businesses in developing countries by linking the level of trust in others that entrepreneurs display in a lab setting to sales data outside of the lab. The results show a robust positive correlation between trust and business success (with sales used as a measure of success): The successful entrepreneurs invested in trust more than the less successful ones did. In the lab, trusting in others is highly profitable, with successful entrepreneurs doing so to the degree required to maximize revenue. However, I found no association between trustworthiness and business success. (JEL O17, L26, C91)     

Trust in surveys and games – A methodological contribution on the influence of money and location

This paper explores methods to study trust. In a variety of settings, answers to survey questions and choices in a trust game are obtained from student sample pools. Some subjects are approached by mail and execute their task at home whereas others participate in classroom experiments. No differences between the results obtained by these methods are observed. Furthermore, one additional group plays the trust game with purely hypothetical payments, and another receives random lottery payments. This changes trust behavior dramatically, whereas trustworthiness is unaffected. Subjects without any financial incentives exhibit less trust and their trust choices are significantly correlated with survey trust answers. There is no such correlation for the corresponding choices with real payments.     

INVESTMENT CHOICE ARCHITECTURE IN TRUST GAMES: WHEN “ALL‐IN” IS NOT ENOUGH

While many economic interactions feature “All‐or‐Nothing” options nudging investors towards going “all‐in,” such designs may unintentionally affect reciprocity. We manipulate the investor's action space in two versions of the “trust game.” In one version investors can invest either “all” their endowment or “nothing.” In the other version, they can invest any amount of the endowment. Consistent with our intentions‐based model, we show that “all‐or‐nothing” designs coax more investment but limit investors' demonstrability of intended trust. As a result, “all‐in” investors are less generously reciprocated than when they can invest any amount, where full investments are a clearer signal of trustworthiness. (JEL C72, C90, C91, D63, D64, L51)     

Trust in triads: An experimental study

Pairs of trustors play finitely repeated Trust Games with the same trustee in a laboratory experiment. We study trustfulness of the trustor and trustworthiness of the trustee. We distinguish between learning and control effects on behavior. Learning effects are related to the trustor's information on past behavior of the trustee. Control effects are related to the trustor's opportunities for sanctioning a trustee in future interactions. Hypotheses on learning and control effects are derived from backward-looking learning models and from forward-looking models of strategic behavior. The design of the experiment, with respect to trustfulness, allows for disentangling learning effects from a trustor's own experience with the trustee and learning effects through third-party information. Also, the design enables disentangling control effects on trustworthiness and trustfulness through a trustor's own sanction opportunities and opportunities for third-party sanctions. We find evidence for learning and control effects. The trustor's own experiences, the experiences of the other trustor, as well as the trustor's own sanction opportunities affect trustfulness. We find evidence for control effects on trustworthiness, including effects arising from opportunities for third-party sanctions. However, there is no evidence for control effects through opportunities for third-party sanctions on trustfulness. This could indicate limited strategic rationality of trustors.     

Deterministic versus probabilistic consequences of trust and trustworthiness: An experimental investigation

There is overwhelming evidence of reciprocal behavior, driven by intentions. However, the role of consequences is less clear cut. Experimentally manipulating how efficient trust and reciprocity can be in deterministic and uncertain environments allows us to study how payoff consequences of trust and trustworthiness affect reciprocity. According to the results for our modified Investment Game, trustees reward trust more when trust is more efficient but do not adjust rewards when the efficiency of rewarding is varied. Furthermore, higher deterministic benefits result in higher levels of reciprocity for all trust levels, whereas an uncertain environment diminishes reciprocity.     

The impact of negotiated exchange on trust and trustworthiness

Negotiated exchanges and trust problems can be regarded as two different forms of exchange, the former representing exchanges with negotiation and binding contracts, the latter representing asymmetric transactions in which one actor has the opportunity to deceive the other. Both forms of exchange have been extensively studied, but the two respective research traditions exhibit very little overlap. In this paper, we investigate the effects of negotiated exchanges in different network structures on the development of mutual trust. We derive hypotheses from various theories and test them by means of an experiment in which subjects first undertake a series of negotiated exchanges under different power conditions, and then face a trust problem with one of the actors that have been involved in the previous exchanges. The trust problem is operationalized by means of the Investment Game which allows us to look separately at trust and trustworthiness. Our results demonstrate that negotiated exchanges increase mutual trust, but not trustworthiness.     

Intentions and ethical behavior in trust games

This paper explores if knowledge of one's partner's intention affects cooperative behavior. Results of a trust game experiment show that Player 1's elicited intentions are consistent over an imperfect information treatment, when Player 2 is not aware of her partner's intention, and a perfect information treatment, when she knows it. Evidence highlights that people's intentions on one side of the games shape their beliefs as to how their partner wants them to act when the roles are reversed. Moreover, in the perfect information treatment, participants act in a manner consistent with their own intentions, suggesting that ethical considerations permeate behavior.     

Before crisis: How near-miss affects organizational trust and industry transference in emerging industries

A near-miss, such as a narrowly avoided collision between vehicles, evades a full-scale accident but can generate media attention that threatens trust. In emerging industries, the effects of near-miss may extend beyond organizational boundaries and influence trust in the industry and technology. This study empirically tests these assertions by examining how media reports of near-miss affect organizational trustworthiness and how trust repair strategies after a near-miss influence organizational and industry trust and technology acceptance in the emerging commercial industry of unmanned aircraft. Notwithstanding parallels to paracrisis, near-miss communication is understudied in public relations research. Further, studies of trust in the context of crisis are recent (see Brühl et al., 2018; Fuoli et al., 2017), and have produced unexpected results that warrant continued exploration in public relations. Underpinned by attribution theory, this study adopts a 2 (near-miss cause: external, low controllability; internal, high controllability) x 3 (trust repair strategy delivered via news story: denial, excuse, apology) scenario-based experiment. This study found that near-miss reduced organizational trustworthiness regardless of whether the event was controllable or not, indicating that when it comes to trust perceptions, near-miss can operate similarly to crisis. Further, apology was the only strategy that arrested a fall in organizational trustworthiness. The study signaled a trust transfer effect where organizational trust influenced industry trust, which led to the acceptance of unmanned aircraft technology. In the context of emerging industries, these findings have implications for organizations that experience near-miss, highlighting the potential for a standardized initial strategy to acknowledge a reduction in trust in order to support trust beyond the organization.     

Group-based trust,trustworthiness and voluntary cooperation: Evidence from experimental and survey data in China

Trust, trustworthiness and cooperation are crucial in achieving social goals, and are thus essential components of social capital. This paper reports the results of a series of lab and artefactual field experiments carried out in Shanghai to evaluate some of the key indicators of social capital in China. The groups selected for the study are middle school and undergraduate university students and community residents. The experiments comprise two public goods games, a gambling game and a trust game. The overall level of trust is negatively related to age, although trusting behavior is also affected by other factors, such as risk-taking.     

Sex Partner Type,Drug Use and Condom Use Self-Efficacy Among African Americans from Disadvantaged Neighborhoods: Are Associations with Consistent Condom Use Moderated by Gender?

Gender inequalities in sexual behavior are explored from the perspective of the theory of gender and power. This study focused on the effect of sex partner type (steady versus casual), drug use, and condom use self-efficacy regarding consistent condom use (CCU) among a community-based sample of adults. The sample included 1,357 African American men and women (M age 37.0, SD 13.1 years; 44% women, 66% men) from 61 disadvantaged census block groups in Atlanta, GA as part of a study of individual and neighborhood characteristics and HIV risk-taking. Having a steady partner decreased the odds of CCU, while higher condom use self-efficacy increased the odds of CCU. Among non-drug users, having a drug-using partner was associated with decreased odds of condom use for women only. Women with drug-using partners, especially a steady partner, were least likely to report CCU. Therefore, interventions intended to empower CCU among women need to expand beyond acknowledging the reduced control that women who use drugs demonstrate to also consider those who have drug-using sexual partners.