Trust Me
Apologies as Signals: With Evidence from a Trust Game
Benjamin Ho
Management Science, forthcoming
Abstract:
Apologies are part of a social institution designed to restore frayed relationships not only in daily life but also in the domains of corporate governance, medical malpractice litigation, political reputation, organizational culture, etc. The theory shows that in a general class of moral hazard games with imperfect information about agents with two-dimensional type, apologies exhibit regular properties - e.g., apologies are more frequent in long relationships, early in relationships, and between better-matched partners. A variant of the trust game demonstrates that communication matters in a manner consistent with economic theory; specifically, the words "I am sorry" appear to select equilibrium behavior consistent with the theory's main predictions.
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Does Social Capital Promote Safety on the Roads?
Matthew Nagler
Economic Inquiry, forthcoming
Abstract:
I present evidence that social capital reduces traffic accidents and related death and injury, using data from a 10-year panel of 48 U.S. states. The econometric challenge is to distinguish the causal effects of social capital from bias resulting from its correlation with unobservable characteristics by state that influence road risks. I accomplish this by employing snow depth as an instrument, and by restricting attention to summertime accidents. My results show that social capital has a statistically significant and sizable negative effect on crashes, traffic fatalities, serious traffic injuries, and pedestrian fatalities that holds up across a range of specifications.
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Sex differences in cooperation: A meta-analytic review of social dilemmas
Daniel Balliet et al.
Psychological Bulletin, forthcoming
Abstract:
Although it is commonly believed that women are kinder and more cooperative than men, there is conflicting evidence for this assertion. Current theories of sex differences in social behavior suggest that it may be useful to examine in what situations men and women are likely to differ in cooperation. Here, we derive predictions from both sociocultural and evolutionary perspectives on context-specific sex differences in cooperation, and we conduct a unique meta-analytic study of 272 effect sizes - sampled across 50 years of research - on social dilemmas to examine several potential moderators. The overall average effect size is not statistically different from zero (d = -0.05), suggesting that men and women do not differ in their overall amounts of cooperation. However, the association between sex and cooperation is moderated by several key features of the social context: Male-male interactions are more cooperative than female-female interactions (d = 0.16), yet women cooperate more than men in mixed-sex interactions (d = -0.22). In repeated interactions, men are more cooperative than women. Women were more cooperative than men in larger groups and in more recent studies, but these differences disappeared after statistically controlling for several study characteristics. We discuss these results in the context of both sociocultural and evolutionary theories of sex differences, stress the need for an integrated biosocial approach, and outline directions for future research.
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Contract Enforceability and the Evolution of Social Capital
Ken Jackson
Journal of Law, Economics, & Organization, forthcoming
Abstract:
Social capital appears to have significant consequences for economic development, yet we know little about how social capital develops or the role of government institutions in promoting or hindering that development. The two key approaches to social capital, as civic engagement or as generalized trust, are combined in a single model focusing on the role of contract enforcement in their development. Contract enforcement is shown to have nonmonotonic effects on civic engagement, generating nonmonotonic effects on the evolution of generalized trust. In particular, moderate levels of contracting institutions may crowd-in civic engagement and trust, whereas high levels of contracting institutions have the opposite effect. Furthermore, the model generates a low-trust trap in which contracting institutions are ineffective at promoting civic engagement or trust.
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Re-thinking the decline in trust: A comparison of black and white Americans
Rima Wilkes
Social Science Research, November 2011, Pages 1596-1610
Abstract:
Generalized trust in other Americans has never been so low. Explanations of this decline draw attention to the role of generational replacement and to period effects stemming from macro-level economic and political changes. In this paper I consider generational and period trends in trust for black and for white Americans. Although race is considered one of the most important predictors of levels of trust, few studies have analyzed how race relates to larger generational and period trends of decline. General Social Survey data is used to test whether the decline thesis applies equally to black and to white Americans' trust levels. I consider both the widely used index of generalized trust and the individual items comprising this index. The results show that although the war baby generation (1935-1944) of white Americans was more trusting than other generations, there has been no corresponding variability across generations for black Americans. At the period level, while there has been a decline in generalized trust and each of its sub-components for white Americans, the period based trends for black Americans are more variable across measures. The use of a general index to study trends for black Americans masks important period-based trends. The decline in trust is related to race and what is missing from most accounts of the race gap in trust is a discussion of structural forces that advantage white Americans and hence inflate their trust levels.
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The hierarchy of virtue: Mutualism, altruism and signaling in Martu women's cooperative hunting
Rebecca Bliege Bird et al.
Evolution and Human Behavior, forthcoming
Abstract:
Cooperative hunting is often assumed to be mutualistic, maintained through returns to scale, where, by working together, foragers can gain higher per capita return rates or harvest sizes than they can by hunting alone. We test this hypothesis among Martu hunters and find that cooperation only provides increased returns to poorer hunters while disadvantaging better hunters. Even so, better hunters still cooperate as frequently as poorer hunters. We ask whether better hunters are advantaged in secondary sharing distributions or whether they bias their partner choice to kin or household members. We find that better hunters are not more likely to pair up with kin and they do not gain consumption benefits from acquiring more. They share a greater proportion of their harvest than poorer hunters: no matter how much one produces - better hunter, worse hunter, cooperator, solitary hunter - all eat the same amount in the end. Such a result suggests the hypothesis that cooperation might be a costly signal of commitment to the public interest on the part of better hunters, which generates trust among camp members and facilitates strong social networks, particularly among women, who cooperate more than men. While some foragers may benefit through cooperation from returns to scale or risk reduction, others may benefit more through signaling commitment and generating trust.
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Can I take your picture? Undercover interviewing to detect deception
Aldert Vrij et al.
Psychology, Public Policy, and Law, forthcoming
Abstract:
There are many contexts in which investigators want to interview suspects about their intentions without alerting the suspects that they are actually being interviewed. In the present experiment, we developed and tested an "undercover interviewing" technique. Liars were instructed to run a crime-related reconnaissance mission to a nearby island and were further instructed to generate an innocent cover-up story to hide their criminal intentions. On arrival at the hovercraft terminal, an undercover agent, acting in the role of either a doctoral student or an amateur photographer, approached the liars and asked apparently innocuous questions about their forthcoming trip. Actual tourists using the hovercraft terminal served as a control group. The questions were designed in the knowledge that liars tend to avoid and escape and do not expect spatial questions and that truth tellers have detailed representations of intentions they are about to execute. In support of the hypotheses, liars were less willing to be photographed, less accurate in identifying the places they planned to visit, and less concrete and more uncertain when describing their intentions.
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Detecting deception in second-language speakers
Cayla Da Silva & Amy-May Leach
Legal and Criminological Psychology, forthcoming
Purpose: We examined whether language proficiency had an impact on lie detection.
Methods: We collected video footage of 30 targets who spoke English as their native or second language and who lied or told the truth about a transgression. Undergraduate students (N = 51) then judged the veracity of these 30 clips and indicated how confident they were in their ratings.
Results: Participants were more confident when judging native-language truth-tellers than second-language truth-tellers. In addition, participants were more likely to exhibit a truth-bias when observing native-language speakers, whereas they were more likely to exhibit a lie-bias when viewing second-language speakers.
Conclusions: Given the difficulties and biases associated with second-language lie detection, further research is needed.
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Bettina Rockenbach & Manfred Milinski
Proceedings of the National Academy of Sciences, forthcoming
Abstract:
Conflicts of interest between the community and its members are at the core of human social dilemmas. If observed selfishness has future costs, individuals may hide selfish acts but display altruistic ones, and peers aim at identifying the most selfish persons to avoid them as future social partners. An interaction involving hiding and seeking information may be inevitable. We staged an experimental social-dilemma game in which actors could pay to conceal information about their contribution, giving, and punishing decisions from an observer who selects her future social partners from the actors. The observer could pay to conceal her observation of the actors. We found sophisticated dynamic strategies on either side. Actors hide their severe punishment and low contributions but display high contributions. Observers select high contributors as social partners; remarkably, punishment behavior seems irrelevant for qualifying as a social partner. That actors nonetheless pay to conceal their severe punishment adds a further puzzle to the role of punishment in human social behavior. Competition between hiding and seeking information about social behavior may be even more relevant and elaborate in the real world but usually is hidden from our eyes.
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Janice Boucher Breuer & John McDermott
Journal of Development Economics, January 2012, Pages 15-23
Abstract:
Trust is an important determinant of economic development. Understanding its origins is therefore critical. We develop a principal-agent model with heterogeneous players to determine the aggregate amount of trustworthiness and trust in a society. People are distributed according to their preference toward caution, which we model as loss aversion. The first two moments of the distribution across principals and agents - along with institutional quality - are critical to the process by which trustworthiness and trust are formed. A direct effect suggests that more caution leads to less societal trust. An indirect effect of greater caution, working through trustworthiness, leads to more trust. Paradoxically, the net effect is almost always positive. The results are similar when we use expected utility theory. Different distributional assumptions can influence the results.
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College Education and Social Trust: An Evidence-Based Study on the Causal Mechanisms
Jian Huang, Henriëtte Maassen van den Brink & Wim Groot
Social Indicators Research, November 2011, Pages 287-310
Abstract:
This paper examines the influence of college education on social trust at the individual level. Based on the literature of trust and social trust, we hypothesize that life experience/development since adulthood and perceptions of cultural/social structures are two primary channels in the causal linkage between college education and social trust. In the first part of the empirical study econometric techniques are employed to tackle the omitted-variable problem and substantial evidence is found to confirm the positive effect of college education. In the second part contemporary information is used to examine the hypothetical mechanisms in the causal inference. That life experience is a primary channel via which college education promotes social trust fails to find support in our examination, while individual perceptions of cultural and social structures explain up to 77% of the causal effect.
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Neither government nor community alone: A test of state-centered models of generalized trust
Blaine Robbins
Rationality and Society, August 2011, Pages 304-346
Abstract:
A classic controversy within the institutionalist literature has yet to be resolved. Does the state either render or erode generalized trust? The crowding out perspective contends that trust decays as a result of the state. The political-institutional perspective maintains that the state molds an environment where trust can grow. Using hierarchical generalized linear models with data from the World Values Survey and other sources, this article directly tests these competing arguments and demonstrates strong support for the political-institutional perspective. Although apparatuses of the state - specifically the public allocation of resources and legal property rights institutions - directly and positively influence generalized trust, these effects are not mediated by voluntary associations or income inequality. Instead, this article reveals that property rights institutions moderate and amplify the positive effect of voluntary associations on generalized trust. I discuss the theoretical implications of the results while exploring limitations and avenues for future research.
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Split or Steal? Cooperative Behavior When the Stakes Are Large
Martijn van den Assem, Dennie van Dolder & Richard Thaler
Management Science, forthcoming
Abstract:
We examine cooperative behavior when large sums of money are at stake, using data from the television game show Golden Balls. At the end of each episode, contestants play a variant on the classic prisoner's dilemma for large and widely ranging stakes averaging over $20,000. Cooperation is surprisingly high for amounts that would normally be considered consequential but look tiny in their current context, what we call a "big peanuts" phenomenon. Utilizing the prior interaction among contestants, we find evidence that people have reciprocal preferences. Surprisingly, there is little support for conditional cooperation in our sample. That is, players do not seem to be more likely to cooperate if their opponent might be expected to cooperate. Further, we replicate earlier findings that males are less cooperative than females, but this gender effect reverses for older contestants because men become increasingly cooperative as their age increases.
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The internet as an indicator of corruption awareness
Rajeev Goel, Michael Nelson & Michael Naretta
European Journal of Political Economy, forthcoming
Abstract:
We apply a standard specification of the causes of corruption to a large sample of countries to investigate the effect of internet awareness about corruption on prevalence and perceptions of corruption. The main hypothesis is that greater corruption awareness acts as a corruption deterrent. A unique data set of internet searches on Google and Yahoo is compiled using alternate variations of "corruption", "bribery" and "country name" keywords to capture internet corruption awareness. Results show that internet hits about corruption per capita correlate negatively with corruption perceptions and corruption incidence. This finding holds generally for different specifications and other robustness checks.
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A controlled field experiment on corruption
Olivier Armantier & Amadou Boly
European Economic Review, December 2011, Pages 1072-1082
Abstract:
This paper reports on a controlled field experiment on corruption designed to address two important issues: the experimenter's scrutiny and the unobservability of corruption. In the experiment, a grader is offered a bribe along with a demand for a better grade. We find that graders respond more favorably to bigger bribes, while the effect of higher wages is ambiguous: it lowers the bribe's acceptance, but it fosters reciprocation. Monitoring and punishment can deter corruption, but we cannot reject that it may also crowd-out intrinsic motivations for honesty when intensified. Finally, our results suggest several micro-determinants of corruption including age, ability, religiosity, but not gender.
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Pre-emptive Corruption, Hold-up and Repeated Interactions
Emmanuel Dechenaux & Andrew Samuel
Economica, forthcoming
Abstract:
This paper analyses repeated interactions between a firm and an inspector who monitors regulatory compliance. The firm may offer a bribe to pre-empt the inspection. Corruption is unfeasible in the one-shot game because of inspector hold-up. In an infinitely repeated game, we characterize the set of bribes that can be sustained as equilibrium paths using the trigger strategy. In this model, the most likely bribe-givers are not the firms that benefit the most from the illegal behaviour. Furthermore, strengthening anti-corruption policies has ambiguous welfare effects because it improves compliance only among a subset of firms, and increases monitoring effort.
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Demography and ecology drive variation in cooperation across human populations
Shakti Lamba & Ruth Mace
Proceedings of the National Academy of Sciences, 30 August 2011, Pages 14426-14430
Abstract:
Recent studies argue that cross-cultural variation in human cooperation supports cultural group selection models of the evolution of large-scale cooperation. However, these studies confound cultural and environmental differences between populations by predominantly sampling one population per society. Here, we test the hypothesis that behavioral variation between populations is driven by environmental differences in demography and ecology. We use a public goods game played with money and a naturalistic measure of behavior involving the distribution of salt, an essential and locally valued resource, to demonstrate significant variation in levels of cooperation across 16 discrete populations of the same small-scale society, the Pahari Korwa of central India. Variation between these populations of the same cultural group is comparable to that found between different cultural groups in previous studies. Demographic factors partly explain this variation; age and a measure of social network size are associated with contributions in the public goods game, while population size and the number of adult sisters residing in the population are associated with decisions regarding salt. That behavioral variation is at least partly contingent on environmental differences between populations questions the existence of stable norms of cooperation. Hence, our findings call for reinterpretation of cross-cultural data on cooperation. Although cultural group selection could theoretically explain the evolution of large-scale cooperation, our results make clear that existing cross-cultural data cannot be taken as empirical support for this hypothesis.
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Noel Johnson & Alexandra Mislin
Journal of Economic Psychology, October 2011, Pages 865-889
Abstract:
We collect data from 162 replications of the Berg, Dickhaut, and McCabe Investment game (the "trust" game) involving more than 23,000 participants. We conduct a meta-analysis of these games in order to identify the effect of experimental protocols and geographic variation on this popular behavioral measure of trust and trustworthiness. Our findings indicate that the amount sent in the game is significantly affected by whether payment is random, and whether play is with a simulated counterpart. Trustworthiness is significantly affected by the amount by which the experimenter multiplies the amount sent, whether subjects play both roles in the experiment, and whether the subjects are students. We find robust evidence that subjects send less in trust games conducted in Africa than those in North America.