An intermediary enhances out-group trust and in-group profit expectation of Chinese but not Australians.

Abstract

In this research, we made a theoretical distinction between direct and intermediary-mediated trust situations, and conducted a cross-cultural (Chinese vs. Australians) investment trust game to test the overlooked effects of an intermediary on investors' trust decisions, with respect to how much to invest in and expect from trustees. Compared to situations of direct trust, a nominal intermediary increased the number of Chinese investors expecting in-group trustees to repay a profit on their investments (Hypothesis 1) and raised their level of investment in out-group trustees (Hypothesis 2). These results applied to Chinese, but not Australians in support of the proposal that a nominal intermediary would serve as a cue to activate different cultural stereotypes of the functions and meanings of an intermediary with respect to trust and expectation of reciprocity. Coexisting with these culture-specific effects of an intermediary, the minimal categorisation of people into in-group and out-group on trivial grounds leads to a highly significant in-group favouritism in investment levels of both Chinese and Australians (Hypothesis 3).