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“We are all born brave, trusting and greedy, and most of us remain
greedy.”Mignon McLaughlin (1966)
Larissa BătrânceaUniversitatea Babeş-Bolyai, Romania
Anca NichitaUniversitatea Babeş-Bolyai, Romania
IAREP/SABE/ICABEEP CONFERENCEHigher School of Economics 1-3 September, Moscow2010
World Value Survey Data
COUNTRY
TRUST DEGREES
TOTAL UNITED STATES
BULGARIA ROMANIA
Trust completely
1,2% 0,3% 2,3% 1,3%
Trust a little 22,1% 40,2% 17,6% 11,6%
Not trust very much
49,5% 45,5% 56% 48,7%
Not trust at all 27,1% 14% 24% 38,4%
Total 100% 1214 (100%) 966 (100%) 1670 (100%)
Table 6. “Trust in completely strangers” levels
www.wvsevsdb.com
The link between trust reported in surveys and economic growth
• Knack & Keefer (1997): find empirical support that trust positively affects growth rates, based on World Value Survey question
• Zak & Knack (2001): income inequality and ethnic diversity affect trust on a national level
Motivation
To compare trust and trustworthiness levels with those in other countries (i.e.
Bulgaria, USA)
Koford (2003): compares results with Berg, Dickhaut & McCabe (1995) data;
Bulgarians had higher levels of trust and trustworthiness, leaving the game with more
money than the Americans did
Cox (2004): American subjects display high levels of trust and trustworthiness
To identify differences between data reported in surveys (World Value Survey)
and economic behavior
Motivation
To study the influence of gender on economic decisions
Chaudhuri & Gangadharan (2002): males were more altruistic in the role of senders
Buchan & Croson (2004): gender didn’t influence senders transfer intentions; in turn,
female receivers stated to be more trustworthy than men did
Buchan, Croson & Solnick (2008): males showed more trust than females; females
were more trustworthy
Research Questions:
1)What are the trust and trustworthiness levels in Romania?
2) Does gender influence subjects‘ behavior?
3) What is the relationship between experimental data and survey data?
Experimental Design
Subjects from rooms A and B are paired randomly
Subjects from rooms A and B are paired randomly
Room ARoom A Room BRoom B
Room ARoom A
10 lei10 lei
Each subject in room A receives an
endowment of 10 lei.
Each subject in room A receives an
endowment of 10 lei.
Room ARoom A Room BRoom B
n lein lei
Each subject in room A decides how much of the 10 lei to sent her
partner in room B
Each subject in room A decides how much of the 10 lei to sent her
partner in room B
Room ARoom A Room BRoom B
n x 3n x 3
The amount sent is tripled
The amount sent is tripled
Room ARoom A Room BRoom B
r leir lei
Each subject in room B decides whether to return something to her
partner in room A
Each subject in room B decides whether to return something to her
partner in room A
At the end of the gameAt the end of the game
First mover’s earning = 10 – n + r
First mover’s earning = 10 – n + r
Second mover’s earning = 3 x n - rSecond mover’s
earning = 3 x n - r
Hypotheses
Trust and trustworthiness levels in Romania differ from those in other countries
Gender influences economic behavior
There is a difference between survey data and experimental data
Subject pool sample
• Gender: 39 females, 27 males
• Age: between 20 and 22
• Education: undergraduate students in Economics
• Number of participants: 68
FEED-BACK FROM SUBJECTS
“Experiments like this should be organized more often, because students actually learn how to handle their potential business partners and what to expect from them.”
“This is a useful experience. It teaches you whom and how much to trust, in the likelihood of starting a business deal in the future.”
“What a fool! Had he given me more, we both would have been better off.”
“This experiment has thought me that, if you are a businessman, you cannot make a decision without taking your partner into account.”
Average transfers comparison Senders trust levels
5,7
6,115,97
5,4
5,65,8
66,2
Romania Bulgaria USA
Country
Am
ou
nt
se
nt
Receivers trustworthiness levels
8,61 7,74
4,94
0
5
10
Romania Bulgaria USA
Country
Am
ou
nt
retu
rne
dR
E
S
U
L
T
S
Average return ratio
151% 132%91%
0%50%
100%150%
200%
Romania Bulgaria USA
Country
Ret
urn
ratio
R
E
S
U
L
T
S
Transfer Patterns
Senders
Receivers
R
E
S
U
L
T
S
Gender effects on transfers
1. Senders transfers
OLS: gender does not influence transfers ( t = 0,736; p = 0,467)
2. Receivers transfers OLS: gender does influence transfers ( t = 1,843; p = 0,075)
R
E
S
U
L
T
S
Trust completely + trust a little
12,90%19,90%
40,50%
0,00%
20,00%
40,00%
60,00%
Romania Bulgaria USA
Country
Tru
st
lev
el
…back to the World Value Survey
R
E
S
U
L
T
S
Instead of conclusions,
…Crossroads of
thoughts
How do we explain the difference between high levels of trust found through experimental games in Eastern Europe and low levels of trust reported by surveys (World Value Survey)?
Does the trust game really measure trust?
Open questions
