On the relational aspects of trust and trustworthiness: results from a laboratory experiment

Do we trust better-connected people more than others and are those who are better connected more trustworthy? Interaction in social networks affects trust as it helps reduce informational asymmetries and identify those whom to trust. It also provides channels for reciprocity where trustworthiness emerges as a relational rather than individual characteristic. We run a laboratory experiment in which trustors decide on how to allocate their endowment to five trustees both before and after a network formation phase. Our results show that trustors are influenced by the behaviour of trustees in the network formation phase: when the allocation is chosen after networks have been formed, trust is directed towards the most frequent connections of the trustor. However, when trustors' offers are anonymous, such increased trust is not reciprocated by trustees. This suggests that social connections do not signal a greater individual propensity to reciprocate trust, but rather provide channels for reciprocity which can only be activated when both trust and trustworthiness are not anonymous

Schools, communities and social capital: building blocks in the 'Big Society' (Research associate full report)

"This study looked at how effective schools engage with their communities. Its aim was to identify key mechanisms that promoted community engagement. It also sought to determine the impact this had on the amount and nature of social capital available to pupils, parents and the wider community. Effective schools were found to generate significant amounts of social capital within their institutions as demonstrated by the degree of trust, reciprocity, civic engagement and social cohesion. Pupil voice was a powerful mechanism in developing a sense of control and self-efficacy. Recently created posts such as family workers, therapists and social work placements extended much of this impact into the family. Schools that went further to promote social capital in the neighbourhood were those with a more aspirational vision that went beyond simply engaging the community to aid school improvement. They viewed community empowerment as key to the success of their pupils and families within the wider social context. They encouraged community leadership and decision-making, often through informal learning approaches, and truly became ‘hubs of the community’, facilitating community development and promoting community cohesion. The findings suggest that a more reciprocal view is needed of the relationship between school and community and that schools could play a central role in creating the ‘Big Society’.

The Instrumental Value Arguments for National Self-Determination

David Miller argues that national identity is indispensable for the successful functioning of a liberal democracy. National identity makes important contributions to liberal democratic institutions, including creating incentives for the fulfilment of civic duties, facilitating deliberative democracy, and consolidating representative democracy. Thus, a shared identity is indispensable for liberal democracy and grounds a good claim for self-determination. Because Miller’s arguments appeal to the instrumental values of a national culture, I call his argument ‘instrumental value’ arguments. In this paper, I examine the instrumental value arguments and show that they fail to justify a group’s right to self-determination

Incentivising Trust

We argue that trust can be incentivised by measures which increase the ability of trusters to protect themselves against risk. We work within the framework originally established by Berg, Dickhaut and McCabe (1995) in which trust is measured experimentally as the ability to generate reciprocity in response to an initial offer of money within a two-person game. An incentive is conveyed both by means of variations in the multiplier applied to the first player´s initial offer and by giving the first player the opportunity to insure themselves against the possibility that the second player will fail to reciprocate their initial offer. Measured trust is strongly responsive to both these incentives. Thus third parties have the ability to influence the outcome of the game, not only, as in the analysis of Charness et al (2008), by punishing failure to reciprocate and rewarding `good´ initial offers, but also by offering protection which strengthens the first player´s risk efficacy, or ratio of assets to risk

Empathy, Asymmetrical Reciprocity, and the Ethics of Mental Health Care

I discuss Young’s “asymmetrical reciprocity” and apply it to an ethics of mental health care. Due to its emphasis on engaging with others through respectful dialogue in an inclusive manner, asymmetrical reciprocity serves as an appropriate framework for guiding caregivers to interact with their patients and to understand them in a morally responsible and appropriate manner. In Section 1, I define empathy and explain its benefits in the context of mental health care. In Section 2, I discuss two potential problems surrounding empathy: the difficulty of perspectivetaking and “compassion fatigue.” In Section 3, I argue that these issues can be resolved if examined through the lens of an ethics of care. Reciprocal relationships between patients and caregivers are an important element in the development of an ethics of care. In Section 4, I introduce two models of reciprocity that can be applied to a health care context: Benhabib’s symmetrical reciprocity and Young’s asymmetrical reciprocity. In Section 5, I demonstrate how asymmetrical reciprocity cultivates empathy and, in Section 6 and Section 7, I show how it overcomes the objections of empathy and improves therapeutic relationships

The role of players’ identification in the population on the trusting and the trustworthy behavior an experimental investigation

We study to what extent identification does matter for trustfulness and trustworthiness to emerge in a population of players. Our experimen- tal protocol is designed for isolating the effects of trustees’ identification. Trustees’ identification is a necessary condition for introducing a reputation mechanism. We run three treatments. In each treatment groups 6 players interact repeatedly and randomly and play a 30 periods investment game (Berg & al. 1995). In the first treatment players can’t identify each other, in the second one players can identify each other as trustee and in the third one players identify each other both as trustee and trustor. We show that, according to the expectation, trustees’ identification has a positive effect on reciprocity. However it doesn’t affect the average trust in the population. Trust is significantly higher than in the complete anonymous treatment only when players identify each other in both roles. We show that this enhance of trust is the result of mutual trust-reciprocity relationships formation.

Rehabilitation and social behavior: Experiments in prison

Despite the economic and social significance of crime reduction and criminals’ rehabilitation, research evaluating the effects of incarceration on behavior is surprisingly scarce. We conduct an experiment with 105 prison inmates and complement it with administrative data in order to explore several aspects of their social behavior. We first perform a comprehensive analysis of behavior in three economic games, finding evidence of discrimination against a sample from outside prison. In addition, our regression analysis reveals that inmates generally become less pro-social towards this out-group the longer they remain incarcerated. Finally, we introduce and evaluate a priming intervention that asks inmates to reflect on their time spent in prison. This intervention has a very sizeable and significant impact, increasing pro-sociality towards the out-group. Hence, a simple, low-cost intervention of this sort can have desirable effects in promoting rehabilitation and integration into social and economic life after release

Why Trust Out-groups? The Role of Punishment Under Uncertainty

We conducted a hidden-effort trust game, in which we assigned subjects to one of two groups. The groups, which were formed through two different group formation processes, included a “social” group that required sharing and exchange among its members, and a “non-social” group that did not. Once assigned, subjects participated in the game with members from both groups, either with or without the opportunity to punish a trustee who may have defected on them. We found that for investors in the non-social group, the opportunity to punish a trustee worked to promote trust, but only when the trustee was a member of the other group. For the social group, the opportunity to punish had no effect on the investors’ trust decisions, regardless of the trustee\u27s group. We provide a theoretical framework to explain this asymmetric effect of punishment on trust. Our results suggest that groups with identities founded in sharing and exchange—a feature of globalized societies—may find it less necessary to engage in costly punishment. As a result, they may enjoy gains in economic efficiency

Coevolution of trustful buyers and cooperative sellers in the trust game

Many online marketplaces enjoy great success. Buyers and sellers in successful markets carry out cooperative transactions even if they do not know each other in advance and a moral hazard exists. An indispensable component that enables cooperation in such social dilemma situations is the reputation system. Under the reputation system, a buyer can avoid transacting with a seller with a bad reputation. A transaction in online marketplaces is better modeled by the trust game than other social dilemma games, including the donation game and the prisoner's dilemma. In addition, most individuals participate mostly as buyers or sellers; each individual does not play the two roles with equal probability. Although the reputation mechanism is known to be able to remove the moral hazard in games with asymmetric roles, competition between different strategies and population dynamics of such a game are not sufficiently understood. On the other hand, existing models of reputation-based cooperation, also known as indirect reciprocity, are based on the symmetric donation game. We analyze the trust game with two fixed roles, where trustees (i.e., sellers) but not investors (i.e., buyers) possess reputation scores. We study the equilibria and the replicator dynamics of the game. We show that the reputation mechanism enables cooperation between unacquainted buyers and sellers under fairly generous conditions, even when such a cooperative equilibrium coexists with an asocial equilibrium in which buyers do not buy and sellers cheat. In addition, we show that not many buyers may care about the seller's reputation under cooperative equilibrium. Buyers' trusting behavior and sellers' reputation-driven cooperative behavior coevolve to alleviate the social dilemma.Comment: 5 figure

Screening, Competition, and Job Design

In recent decades, many firms offered more discretion to their employees, often increasing the productivity of effort but also leaving more opportunities for shirking. These “high-performance work systems” are difficult to understand in terms of standard moral hazard models. We show experimentally that complementarities between high effort discretion, rent-sharing, screening opportunities, and competition are important driving forces behind these new forms of work organization. We document in particular the endogenous emergence of two fundamentally distinct types of employment strategies. Employers either implement a control strategy, which consists of low effort discretion and little or no rent-sharing, or they implement a trust strategy, which stipulates high effort discretion and substantial rent-sharing. If employers cannot screen employees, the control strategy prevails, while the possibility of screening renders the trust strategy profitable. The introduction of competition substantially fosters the trust strategy, reduces market segmentation, and leads to large welfare gains for both employers and employees