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Trust and trustworthiness in games: An experimental study of intergenerational advice

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  • Andrew Schotter
  • Barry Sopher

Abstract

This paper investigates the development of conventions of trust in what we call intergenerational games, i.e., games played by a sequence of non-overplapping agents, who pass on advice on how to play the game across adjacent generations of players. Using the trust game of Berg et al. (1995) as our experimental decision problem, advice seems to decrease the amount of trustthat evolves when this game in played in an inter-generational manner in that it decreases the amount of money sent from Senders to Returners. Ironically, advice increases trustworthinessin that Returners tend to send more back. Further, subjects appear to follows conventions of reciprocity in that they tend to Send more if they think the Returners acted in a “kind” manner, where kind means the Sender sent more money than the receiver expected. Finally, while we find a causal relationship running from trustworthiness to trust, the opposite can not be established. We note that many of our results can only be achieved using the tools offered by inter-generational games. The inter-generational advice offered provides information not available when games are played in their static form. Combining that information with elicited beliefs of the Senders and Returners adds even more information that can be used to investigate the motives that subjects have for doing what they do. Copyright Economic Science Association 2006

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  • Andrew Schotter & Barry Sopher, 2006. "Trust and trustworthiness in games: An experimental study of intergenerational advice," Experimental Economics, Springer;Economic Science Association, vol. 9(2), pages 123-145, June.
    • Handle: RePEc:kap:expeco:v:9:y:2006:i:2:p:123-145
    DOI: 10.1007/s10683-006-5386-y
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    References listed on IDEAS

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    1. Isaac, R Mark & Plott, Charles R, 1981. "Price Controls and the Behavior of Auction Markets: An Experimental Examination," American Economic Review, American Economic Association, vol. 71(3), pages 448-459, June.
    2. Yaw Nyarko & Andrew Schotter, 2002. "An Experimental Study of Belief Learning Using Elicited Beliefs," Econometrica, Econometric Society, vol. 70(3), pages 971-1005, May.
    3. Andrew Schotter & Barry Sopher, 2003. "Social Learning and Coordination Conventions in Intergenerational Games: An Experimental Study," Journal of Political Economy, University of Chicago Press, vol. 111(3), pages 498-529, June.
    4. Berg Joyce & Dickhaut John & McCabe Kevin, 1995. "Trust, Reciprocity, and Social History," Games and Economic Behavior, Elsevier, vol. 10(1), pages 122-142, July.
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