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Trust and Reciprocity

Interdisciplinary Lessons for Experimental Research

Elinor Ostrom, James Walker

Publication Year: 2003

Trust is essential to economic and social transactions of all kinds, from choosing a marriage partner, to taking a job, and even buying a used car. The benefits to be gained from such transactions originate in the willingness of individuals to take risks by placing trust in others to behave in cooperative and non-exploitative ways. But how do humans decide whether or not to trust someone? Using findings from evolutionary psychology, game theory, and laboratory experiments, Trust and Reciprocity examines the importance of reciprocal relationships in explaining the origins of trust and trustworthy behavior. In Part I, contributor Russell Hardin argues that before one can understand trust one must account for the conditions that make someone trustworthy. Elinor Ostrom discusses evidence that individuals achieve outcomes better than those predicted by models of game theory based on purely selfish motivations. In Part II, the book takes on the biological foundations of trust. Frans de Waal illustrates the deep evolutionary roots of trust and reciprocity with examples from the animal world, such as the way chimpanzees exchange social services like grooming and sharing. Other contributors look at the links between evolution, cognition, and behavior. Kevin McCabe examines how the human mind processes the complex commitments that reciprocal relationships require, summarizing brain imaging experiments that suggest the frontal lobe region is activated when humans try to cooperate with their fellow humans. Acknowledging the importance of game theory as a theoretical model for examining strategic relationships, in Part III the contributors tackle the question of how simple game theoretic models must be extended to explain behavior in situations involving trust and reciprocity. Reviewing a range of experimental studies, Karen Cook and Robin Cooper conclude that trust is dependent on the complex relationships between incentives and individual characteristics, and must be examined in light of the social contexts which promote or erode trust. As an example, Catherine Eckel and Rick Wilson explore how people's cues, such as facial expressions and body language, affect whether others will trust them. The divergent views in this volume are unified by the basic conviction that humans gain through the development of trusting relationships. Trust and Reciprocity advances our understanding of what makes people willing or unwilling to take the risks involved in building such relationships and why.

Published by: Russell Sage Foundation

Title Page, Copyright Page

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Contents

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pp. vii-viii

Contributors

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pp. ix-x

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Preface

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pp. xi-xiv

This book is the result of a series of meetings on trust held at the Russell Sage Foundation. All of these meetings, in turn, have been a part of a much broader project on trust organized by Karen Cook of Stanford University, Russell Hardin of New York University...

Part 1. Introduction: Social Dilemmas and Trust

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pp. 1-2

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1. Introduction

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pp. 3-22

Imagine the following decision situation involving two individuals. Individual 1 is endowed with $10.00. She can keep the entire sum or send some part of the $10 to individual 2, an anonymous counterpart. Individual 1 knows that any money sent to individual 2...

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2. Toward a Behavioral Theory Linking Trust, Reciprocity, and Reputation

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pp. 23-83

Acentral question has overshadowed the thinking of social scientists at least since the work of Thomas Hobbes (1960 [1651]): How do communities of individuals sustain agreements that counteract individual temptations to select short-term, hedonistic actions when all parties would be better off if each party...

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3. Gaming Trust

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pp. 84-106

Along-standing and substantial body of work addresses problems of cooperation under several labels, including collective action, prisoner’s dilemma, and social dilemma. Much of this work has been experimental. The forms of the games in various experiments vary enormously, but most of them are prisoner’s dilemmas...

Part 2. Biological Foundations of Trust and Reciprocity

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pp. 107-108

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4. Biological Foundations of Reciprocity

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pp. 109-131

For the past several decades, biologists have struggled with the so-called problem of altruism and the related issue of cooperation as these phenomena, at first glance, seem to be in conflict with the principles of natural selection, the cornerstone of modern...

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5. The Chimpanzee's Service Economy: Evidence for Cognition-Based Reciprocal Exchange

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pp. 132-148

Because organisms are supposed, first of all, to look out for themselves, biology treats cooperation as a puzzle. Why do animals suffer costs to assist one another, sometimes literally giving their lives so that others may live? Should not such behavior have...

Part 3. The Links Between Evolution, Cognition, and Behavior

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pp. 149-150

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6. A Cognitive Theory of Reciprocal Exchange

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pp. 151-173

Human reciprocity is a set of behaviors generated by a cognitive strategy that is implemented in the evolved embodied neural circuitry of the central and peripheral nervous system. This means that the study of reciprocity is conducted on at least four...

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7. Conflict, Interpersonal Assessment, and the Evolution of Cooperation: Simulation Results

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pp. 174-210

How cooperative dispositions might have evolved among social animals has, for many years, been productively addressed within the prisoner’s dilemma paradigm. That game captures the intuition that by cooperating, individuals can often produce...

Part 4. Experimental Evidence

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pp. 211-212

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8. Experimental Studies of Cooperation, Trust, and Social Exchange

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pp. 213-248

Trust has become a central topic of discussion in the social sciences during the past decade. Francis Fukuyama (1995), Robert Putnam (1993, 2000), Niklas Luhmann (1988), and others argue that trust is an essential social lubricant; it facilitates cooperation and...

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9. The Human Face of Game Theory: Trust and Reciprocity in Sequential Games

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pp. 249-278

The high degree of initial cooperation among strangers is a fascinating empirical regularity. This is not to say that all individuals begin by behaving cooperatively, nor is it the case that a given individual always begins by behaving cooperatively. Humans...

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10. Strategic Analysis in Games: What Information Do Players Use?

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pp. 279-305

Although observations broadly consistent with the predictions of noncooperative game theory have been commonly observed in certain auction markets (Smith 1982), the theory has been markedly less successful in accounting for behavior in two-person...

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11. Trust in Children

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pp. 306-326

Many trade relationships are not covered by complete contracts. Although the involved parties may prefer a legally binding agreement, it is often too costly to construct a contract that fully accounts for the possible contingencies of the relationship. Absent such contracts, otherwise advantageous trades may be...

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12. Trust in Two-Person Games: Game Structures and Linkages

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pp. 327-355

Contrast the following decision situation with the one described in the first chapter of this volume. Two individuals face the following choice. They are each endowed with $5. If individual 1 gives her $5 to individual 2, individual 2 receives $10. Similarly, if individual 2 gives his $5 to individual 1, individual 1...

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13. Cross-Societal Experimentation on Trust: A Comparison of the United States and Japan

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pp. 356-374

It is generally believed that Japanese society and, in particular, business relations in Japan are characterized by a high level of trust. Collectivist preferences for in-group harmony and mutually cooperative practices in Japan are believed to underlie the high level of general trust, particularly in contrast with the individualistic and...

Part 5. Conclusions

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pp. 375-376

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14. The Transformation of a Skeptic: What Nonexperimentalists Can Learn from Experimentalists

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pp. 377-384

Reading through this collection of papers for the purpose of writing a concluding note on “what social scientists can learn” has proved a daunting task. My own work is in historical and comparative political economy. My role in the scholarly division of...

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15. Conclusion

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pp. 385-392

Acentral question lies at the core of the social sciences: How do individuals form and sustain agreements or relationships with others to counteract individual temptations to select actions based only on short-sighted, individual incentives? In other...

Glossary

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pp. 393-398

Index

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pp. 399-414


E-ISBN-13: 9781610444347
Print-ISBN-13: 9780871546470
Print-ISBN-10: 0871546477

Page Count: 424
Publication Year: 2003

Series Title: Russell Sage Foundation Series on Trust
Series Editor Byline: Karen S. Cook, Russell Hardin, Margaret Levi, series editors