Social Norms, Information and Trust among Strangers: Theory and Evidence

Can a social norm of trust and reciprocity emerge among strangers? We investigate this question by examining behavior in an experiment where subjects repeatedly play a two-player binary ―trust‖ game. Players are randomly and anonymously paired with one another in each period. The main questions addressed are whether a social norm of trust and reciprocity emerges under the most extreme information restriction (anonymous community-wide enforcement) or whether trust and reciprocity require additional, individual-specific information about a player’s past history of play and whether that information must be provided freely or at some cost. In the absence of such reputational information, we find that a social norm of trust and reciprocity is difficult to sustain. The provision of reputational information on past individual decisions significantly increases trust and reciprocity, with longer histories yielding the best outcomes. Importantly, we find that making reputational information available at a small cost may also lead to a significant improvement in trust and reciprocity, despite the fact that most subjects do not choose to purchase this information.Social Norms, Trust Game, Random Matching, Trust and Reciprocity, Information, Reputational Mechanisms, Experimental Economics.

Social norms and trust among strangers

We study the development of a social norm of trust and reciprocity among a group of strangers via the “contagious strategy” as defined in Kandori (1992). Over an infinite horizon, the players anonymously and randomly meet each other and play a binary trust game. In order to provide the investors with proper incentives to follow the contagious strategy, there is a sufficient condition that requires that there exists an outside option for the investors. Moreover, the investorsʼ payoff from the outside option must converge to the payoff from trust and reciprocity as the group size goes to infinity. We show that this sufficient condition is also a necessary condition to sustain any sequential equilibrium in which the trustees adopt the contagious strategy. Our results imply that a contagious equilibrium only supports trust if trust contributes almost nothing to the investorsʼ payoffs

Social capital and deceased organ donation

This chapter examines the link between deceased organ donation and social capital from a theoretical standpoint.In this chapter, the theoretical links between deceased organ donation and social capital theory are examined and evaluated

Economic Activities and Networks of Relatioships

The fundamental question I address in the dissertation is how the behavior of economic agents interacts with networks of relationships which underlie a wide set of economic situations. In Ch. 2, entitled "Decentralized Information Sharing in Oligopoly," I analyze the incentives of firms for information sharing in a decentralized environment when firms face a stochastic demand. In order to do that, I develop a two stage model of strategic network formation, where a cooperative network formation stage is played in the first stage and a noncooperative Bayesian Cournot game is played in the second stage. I derive pure strategy mixed cooperative and noncooperative equilibria that are subgame perfect and stable, and characterize the resulting network structures. Ch. 3, entitled "A War of Attrition in Network Formation," investigates the strategic behavior of agents when they face a decision on the formation of relationships. I apply a war of attrition to the dynamic network formation process when links among agents have characteristics of public goods. Agents are randomly but exogenously matched in each stage. Based on Bala and Goyal's (2000) two-way flow model, I characterize the subgame-perfect equilibrium outcomes and discuss their efficiency. Finally, Ch. 4, entitled "Social Norms and Trust among Strangers," (with Huan Xie) studies the development of trust and reciprocity among strangers in the indefinitely repeated trust game with random matching. If reputation is attached to the community as a whole and if a single defection leads to the destruction of the cooperative social norm through contagious punishments, the cooperative social norm can be sustained by the self-interested community members in the equilibrium. We provide sufficient conditions that support the social norm of trust and reciprocity as a sequential equilibrium

Location, safety and (non) strangers in gay men’s narratives on ‘hook-up’ apps

Hook-up websites and apps are said to be transforming the sexual lives of gay men and have been linked with the apparent erosion of gay publics as the basis for identity politics and social action. This article examines these dynamics in the interview and focus-group talk of gay men living on the economic and geographical margins of metropolitan gay culture. It offers perspectives on the importance of location – class, generation and space – for the experience of digital media, the negotiation of safety, and the new codifications and elaborations on sex with the (non) stranger; a figure who is not alien, yet not familiar, in sexual sociality. Reflecting on these situated perspectives in connection with debates on the erosion of gay publics, this article argues against monolithic framings of gay men’s sexual lives after digital media

Social Relationships and Trust

While social relationships play an important role for individuals to cope with missing market institutions, they also limit individuals' range of trading partners. This paper aims at understanding the determinants of trust at various social distances when information asymmetries are present. Among participants from an informal housing area in Cairo we find that the increase in trust following a reduction in social distance comes from the fact that trustors are much more inclined to follow their beliefs when interacting with their friend. When interacting with an ex-ante unknown agent instead, the decision to trust is mainly driven by social preferences. Nevertheless, trustors underestimate their friend's intrinsic motivation to cooperate, leading to a loss in social welfare. We relate this to the agents' inability to signal their trustworthiness in an environment characterized by strong social norms.Trust, hidden action, social distance, solidarity, reciprocity, economic development

The Nature of Legal Dispute Bargaining

The longstanding debate over the relative merits of adversarial and communitarian theories of legal dispute bargaining has been in somewhat of a holding pattern for several years, but recent research in the field of cognitive neuroscience may break the logjam. Laboratory experiments and case studies in that field have shown how dispositions and capacities for social cooperation inherited from natural selection and evolution predispose humans to configure disputing as a mixture of argument over factual reality, disagreement over the interpretation of normative standards, and a search for impartial resolutions that protect the interests of everyone involved equally. This neurobiological inheritance can be difficult to appreciate, resist, and control, but it is something all dispute bargaining theory, adversarial and communitarian alike, must take into account. Theories that ignore it are limited to telling only part of the dispute bargaining story

Social Relationships and Trust

While social relationships play an important role for individuals to cope with missing market institutions, they also limit individuals' range of trading partners. This paper aims at understanding the determinants of trust at various social distances when information asymmetries are present. Among participants from an informal housing area in Cairo we find that the increase in trust following a reduction in social distance comes from the fact that trustors are much more inclined to follow their beliefs when interacting with their friend. When interacting with an ex-ante unknown agent instead, the decision to trust is mainly driven by social preferences. Nevertheless, trustors underestimate their friend's intrinsic motivation to cooperate, leading to a loss in social welfare. We relate this to the agents' inability to signal their trustworthiness in an environment characterized by strong social norms.trust, hidden action, social distance, solidarity, reciprocity, economic development

Guns, germs, and stealing: exploring the link between infectious disease and crime.

Can variation in crime rates be traced to the threat of infectious disease? Pathogens pose an ongoing challenge to survival, leading humans to adapt defenses to manage this threat. In addition to the biological immune system, humans have psychological and behavioral responses designed to protect against disease. Under persistent disease threat, xenophobia increases and people constrict social interactions to known in-group members. Though these responses reduce disease transmission, they can generate favorable crime conditions in two ways. First, xenophobia reduces inhibitions against harming and exploiting out-group members. Second, segregation into in-group factions erodes people's concern for the welfare of their community and weakens the collective ability to prevent crime. The present study examined the effects of infection incidence on crime rates across the United States. Infection rates predicted violent and property crime more strongly than other crime covariates. Infections also predicted homicides against strangers but not family or acquaintances, supporting the hypothesis that in-group-out-group discrimination was responsible for the infections-crime link. Overall, the results add to evidence that disease threat shapes interpersonal behavior and structural characteristics of groups

The Use and Abuse of Trust: Social Capital and its Deployment by Early Modern Guilds

Guilds are social scientists’ favoured historical example of institutions generating a ‘social capital’ of trust that benefited entire economies. This article considers this view in the light of empirical findings for early modern Europe. It draws the distinction between a ‘particularized’ trust in persons of known attributes and a ‘generalized’ trust that applies even to strangers. This is paralleled by the distinction between a ‘differential’ trust in institutions that enforce the rights of certain groups and a ‘uniform’ trust in impartial institutions that enforce the rights of all. Guilds had the potential to generate the particularized and differential trust to solve market failures relating to product quality, training, and innovation, although the empirical findings suggest that they often failed to fulfil this potential. Guilds also had the potential to abuse their trust, and the empirical findings show that they indeed manipulated their social capital of shared norms, common information, mutual sanctions, and collective political action to benefit their members at others’ expense, blocking the spread of generalized and uniform trust. Counter to the assumptions of social capital theory, the example of pre-industrial guilds suggests that the particularized and differential trust fostered by associative institutions do not favour but hinder the generalized and uniform trust fostered by impartial institutions.