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Strategic Trustworthiness via Unstrategic Third-party Reward – An Experiment

Author

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  • Lilia Zhurakhovska

    (University of Erlangen-Nuremberg & Max Planck Institute for Research on Collective Goods, Bonn)

Abstract

In modern societies more and more people interact with strangers in one-shot situations. In these situations it might be difficult to trust others. Yet, trust is an essential component of most economic interactions. In this paper (in a one-shot situation) an impartial third party can reward another stranger for being trustworthy towards another unrelated person. By design the reward is costly and cannot be strategically motivated. Subjects strategically increase their trustworthiness towards others if they can anticipate to be rewarded for such behavior by an impartial third party. Impartial third parties reward trustworthiness irrespective of whether it can be anticipated.

Suggested Citation

  • Lilia Zhurakhovska, 2014. "Strategic Trustworthiness via Unstrategic Third-party Reward – An Experiment," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2014_06, Max Planck Institute for Research on Collective Goods, revised Jan 2017.
    • Handle: RePEc:mpg:wpaper:2014_06
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    References listed on IDEAS

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    More about this item

    Keywords

    Norms; strong indirect reciprocity; third-party reward; trust game; helping game; anticipation;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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