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Trust games measure trust

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Listed:
  • 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 predict decisions in the risk game, but not the trust game.

Suggested Citation

  • Houser, Daniel & Schunk, Daniel & Winter, Joachim, 2006. "Trust games measure trust," Papers 06-14, Sonderforschungsbreich 504.
    • Handle: RePEc:mnh:spaper:2575
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    File URL: https://madoc.bib.uni-mannheim.de/2575/1/dp06_14.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.
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      • Glaeser, Edward Ludwig & Laibson, David I. & Scheinkman, Jose A. & Soutter, Christine L., 2000. "Measuring Trust," Scholarly Articles 4481497, Harvard University Department of Economics.
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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, 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.
    3. 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.
    4. Aimone, Jason A. & Houser, Daniel, 2013. "Harnessing the benefits of betrayal aversion," Journal of Economic Behavior & Organization, Elsevier, vol. 89(C), pages 1-8.
    5. Bellemare, Charles & Bissonnette, Luc & Kröger, Sabine, 2007. "Flexible Approximation of Subjective Expectations Using Probability Questions: An Application to the Investment Game," IZA Discussion Papers 3121, Institute of Labor Economics (IZA).
    6. Maroš Servátka & Steven Tucker & Radovan Vadovič, 2008. "Strategic Use of Trust," Working Papers in Economics 08/11, University of Canterbury, Department of Economics and Finance.
    7. 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.
    8. 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.
    9. Ronnie Bryan & Pietro Perona & Ralph Adolphs, 2012. "Perspective Distortion from Interpersonal Distance Is an Implicit Visual Cue for Social Judgments of Faces," PLOS ONE, Public Library of Science, vol. 7(9), pages 1-9, September.
    10. 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.

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    More about this item

    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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