Behavior In Trust Game Research Articles

Outcome Evaluation Affects Facial Trustworthiness: An Event-Related Potential Study.

Facial trustworthiness and feedback information of trustees can influence trustors’ investment behavior in trust games. This study investigated the temporal features of outcome evaluation (evaluation of feedback) and how they influence the processing of facial trustworthiness. A total of 25 college students participated in a decision-making task in which feedback was presented prior to a face stimulus. The decision of participants to continue investing was evaluated. We observed that trustors were more inclined to keep investing in trustworthy trustees or those appearing after positive feedback (gains). Event-related potential (ERP) results revealed that in the face presentation stage, trustworthy faces with losses induced more negative feedback-related negativity (FRN) than did trustworthy faces with gains and untrustworthy faces with losses. Further, faces that did not meet expectations induced more negative FRN. Trustworthy faces with gains induced more positive late positive component (LPC) than did trustworthy faces with losses and generated more motivated attention. Bottom–up and top–down processes were integrated for facial trustworthiness perception at different stages. In sum, top–down processing exerted a greater impact during the early stage of facial trustworthiness perception, both top–down and bottom–up processing were involved in the medium term, and bottom–up processing exerted a greater impact in the later stage.

Is it All Connected? A Testing Ground for Unified Theories of Behavioral Economics Phenomena

We estimate 11 well-studied behavioral phenomena in a group of 190 laboratory subjects (short-term discount rates, small stakes risk aversion, present bias, loss aversion, the endowment effect, aversion to ambiguity and compound lotteries, the common ratio and common consequence effects and sender/receiver behavior in trust games). We study the joint distribution of these behaviors and compare it to the predictions of existing models as a step in the development of a parsimonious, general model of economic choice. We find strong correlations between loss aversion and the endowment effect, and between probability weighting (as measured by the common ratio and common consequence effects) and risk aversion, in line with Cumulative Prospect Theory (CPT). We also find risk aversion to be related to ambiguity aversion, compound lottery aversion and discounting, consistent with the curvature of the utility function being an important determinant of all three behaviors. However, we do not find evidence that probability weighting in the risk domain is related to ambiguity and compound lottery aversion or present bias (as implied by recent extensions to CPT). Behavior in the trust game is unrelated to attitudes to risk or uncertainty. We find little relation between intelligence or personality measures and economic behavior, although we do find overconfidence to be negatively related to many behaviors (particularly ambiguity aversion) and women to be much more loss averse than men.

To Trust or Not to Trust That is Not the Question

We propose that there are three determinants of sender behavior in trust games: Beliefs re-garding the amounts returned, risk aversion, and reciprocity. Particularly, we are interested in the role of reciprocity because the possibility of negative expected reciprocal utility may lead to betrayal-averse sender behavior, i.e. to a situation where reciprocal subjects send less money than solely selfish ones. In our experiment, most subjects show distinct social preferences in the receiver role, but in the sender role they do not distinguish between a standard trust game with a human partner and a non-social, lottery-like setting, where a computer plays the role of the receiver. This means that the relevance of reciprocity considerations under uncertainty might be fundamentally different from those when no uncertainty is present. Furthermore, we find that sendings are mainly driven by overoptimistic beliefs. We use a modified version of the reciprocity model of Dufwenberg and Kirchsteiger [Games Econ. Beh. 47 (2004) 268] to explain our results and thereby show why reciprocal and selfish subjects almost do not differ in their sending behavior if one controls for beliefs and risk aversion. For other experimental settings, our model does predict differing behavior, which is in line with findings reported in the literature.

Self-serving biases and public justifications in trust games

Often, when several norms are present and may be in conflict, individuals will display a self-serving bias, privileging the norm that best serves their interests. Xiao and Bicchieri (J Econ Psychol 31(3):456–470, 2010) tested the effects of inequality on reciprocating behavior in trust games and showed that—when inequality increases—reciprocity loses its appeal. They hypothesized that self-serving biases in choosing to privilege a particular social norm occur when the choice of that norm is publicly justifiable as reasonable, even if not optimal for one of the parties. In line with the literature on motivated reasoning, this justification should find some degree of support among third parties. The results of our experimental survey of third parties support the hypothesis that biases are not always unilateral selfish assessments. Instead, they occur when the choice to favor a particular norm is supported by a shared sense that it is a reasonable and justifiable choice.

Race, diversity and pro-social behavior in a segmented society

This paper examines the impact of racial identity on behavior in trust games played by public high school students in South Africa. There is a systematic pattern of distrust towards Black partners, even by Black proposers, partially attributable to mistaken expectations. Non-Black proposers are significantly less likely to engage in a strategic interaction at all when paired with a Black partner, while Black proposers engage in exchange but at lower levels than when paired with non-Blacks. However, greater racial diversity in public schools promotes pro-social behavior towards Black partners.

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.

Reciprocity in Economic Games

Abstract The evidence of laboratory experiments of behavioral economists shows that individuals behave reciprocally. These data put into question the pure self-interest thesis of human motivation of the homo oeconomicus model and call for alternative models. Focusing on the explanation of reciprocal behavior in Trust Games, this article proposes two directions that economists and other social scientists might want to consider in order to establish a more solid foundation for economic theory. First, it presents models that economic theorists developed to explain the laboratory evidence of reciprocal behavior. It highlights that all of these models subscribe to the Humean view that desires are at the source of any human motivation and suggests an alternative Kantian model where reasons have the capacity to motivate human action. Second, it emphasizes that a supplementary examination of the social background conditions would illuminate the analysis of the findings because of the connection between the 'local' and society-wide demands of reciprocity.

Whatever you say, your reputation precedes you: Observation and cheap talk in the trust game

Behavior in trust games has been linked to general notions of trust and trustworthiness, important components of social capital. In the equilibrium of a trust game, the investor does not invest, foreseeing that the allocator would keep all of the returns. We use a human-subjects experiment to test the effects of changes to the game designed to increase cooperation and efficiency. We add a pre-play stage in which the investor receives a cheap-talk message from the allocator, observes the allocator's previous decision, or both. None of these changes alter the game's theoretical predictions. We find that allowing observation results in substantially higher cooperation and efficiency, but cheap talk has little effect.

When is trust reciprocated?

When does a person who has been trusted reciprocate that trust? Kiyonari, Yamagishi, Cook, and Cheshire (2006) compared behavior in trust games and faith games and showed that in one-shot games, players who were trusted did not reciprocate that trust. In an experiment using trust games and dictator games, we examined what type of trust would elicit reciprocation of that trust by the trustee. In the experiment, information about the reason to trust the truster was manipulated to separate trust types into "trust attributable to the trustee" and "trust attributable to the truster." We determined how much reciprocation was elicited by each of these types of trust. The results showed that trustees are more likely to reciprocate trust for "trust attributable to the trustee" than for "trust attributable to the truster."