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A game-theoretic model of reciprocity and trust that incorporates personality traits

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  • Guzmán, Ricardo
  • Harrison, Rodrigo
  • Abarca, Nureya
  • Villena, Mauricio G.

Abstract

We propose a game-theoretic model of reciprocity and trust that incorporates personality traits. In the model, positive and negative reciprocity are “reciprocal preferences:” parameters of heterogeneous utility functions that take into account the material welfare of others (positively if they have been kind, negatively if they have been hostile). Trust, on the other hand, is an individual bias that distorts probabilistic beliefs about the trustworthiness of others. Unlike typical game-theoretic models, our model provides an explanation for the heterogeneity of preferences and probabilistic beliefs: a person’s personality traits determine both the parameters of his utility function and the magnitude of his beleif bias. We tested the model experimentally. Subjects completed a psychometric questionnaire that measures three personality traits: positive reciprocity, negative reciprocity, and trust. Subsequently, they played a sequential prisoner’s dilemma with random re-matching and payoffs changing from round to round. From the subjects’ psychometric scores and game behaviors we inferred the relationship between reciprocal preferences, belief biases, and personality. The results confirmed the hypotheses of the model.

Suggested Citation

  • Guzmán, Ricardo & Harrison, Rodrigo & Abarca, Nureya & Villena, Mauricio G., 2020. "A game-theoretic model of reciprocity and trust that incorporates personality traits," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 84(C).
    • Handle: RePEc:eee:soceco:v:84:y:2020:i:c:s2214804319301788
    DOI: 10.1016/j.socec.2019.101497
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    References listed on IDEAS

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    1. Jordi Brandts & Gary Charness, 2011. "The strategy versus the direct-response method: a first survey of experimental comparisons," Experimental Economics, Springer;Economic Science Association, vol. 14(3), pages 375-398, September.
    2. Anke Becker & Thomas Deckers & Thomas Dohmen & Armin Falk & Fabian Kosse, 2012. "The Relationship Between Economic Preferences and Psychological Personality Measures," Annual Review of Economics, Annual Reviews, vol. 4(1), pages 453-478, July.
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    4. Kagel, John & McGee, Peter, 2014. "Personality and cooperation in finitely repeated prisoner’s dilemma games," Economics Letters, Elsevier, vol. 124(2), pages 274-277.
    5. Carrasco, José A. & Harrison, Rodrigo & Villena, Mauricio, 2018. "Interdependent preferences and endogenous reciprocity," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 76(C), pages 68-75.
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    More about this item

    Keywords

    Reciprocity; Trust; Personality; Psychometrics; Revealed preferences;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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