Trust and Reciprocity: Interdisciplinary Lessons for Experimental Research

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

209 Chapter 8 Experimental Studies of Cooperation, Trust, and Social Exchange Karen S. Cook and Robin M. Cooper T rust 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 contributes to the maintenance of social order at the micro level as well as at the societal level. Social order might exist without trust if supported by strong institutions that ensure commitments, provide for sanctioning and monitoring, and enforce contracts (see Barber 1983; Hardin 1999; Luhmann 1988). The capacity to engage in mutually beneficial relationships based on trust and reciprocity extends the reach of institutionally supported activities, however, and enables a range of interactions that would not be possible in the absence of such institutions. The contributors to this volume explore the microfoundations of trusting relationships, primarily using the experimental method. This work produces a more fine-grained analysis of the structure of trust relationships and the motivations for engaging in cooperative behavior that is the hallmark of social order in any society . The primary focus of the micro-level work is the behavior George Homans (1974 [1961]) likes to call “sub-institutional.” Social psychologists since the 1960s have investigated the conditions that facilitate social cooperation. The central research question addressed in this work has been, “What makes cooperation in society possible?” To study this question at the micro level, experimentalists 210 Trust and Reciprocity developed specific paradigms (for example, experimental games) with which to analyze the determinants of cooperative behavior in the laboratory. Limitations to this work led researchers to attempt to develop survey measures of trust that could be used outside the laboratory . Since then, most of the research on trust, cooperation, and social exchange has relied on these two methodologies. This chapter provides a broad overview of the research that contributes to our understanding of the role of trust at the micro level of society. In particular, we investigate the role of trust as a facilitator of spontaneous cooperation and informal social exchange. An overarching theme of this chapter is that the experimental research on trust must eventually provide a richer sense of the effects of social context if it is to inform our understanding of the role of trust in society at large. Prisoners Fail to Cooperate; Do We? Game theory has become the primary tool for investigating the incentive structures and related factors that facilitate or inhibit cooperation. The paradigmatic case is the analysis of cooperation (and noncooperation , usually called defection) in the prisoner’s dilemma (Luce and Raiffa 1957). The prisoner’s dilemma became the foundation for the analysis of cooperation, in part, because the game structure so clearly represents the nature of the conflicting incentives involved in certain social situations—namely, those in which the individual incentives to defect (for example, turn state’s evidence) overshadow the collective benefit that might be obtained from jointly cooperating (for example, not squealing and going free). Some would argue that the issue at the center of this dilemma is one of trust. Did the separately jailed prisoners trust that their partner in crime would not be tempted to turn state’s evidence to gain a lighter sentence? Oddly, the real-world dilemma was more complex than that represented in most experimental versions, which do not allow for prior interaction between the players. In fact, only recently (see chapter 12 and others in this volume) have researchers begun to examine trust in the context of repeated play with the same partners over time. The typical one-shot prisoner’s dilemma represents a twoperson mixed-motive situation in which each actor has only two options : to cooperate or to defect. Neither actor knows at the time he or she makes the decision what the other actor will do. The outcomes vary depending on the actor’s own choice and the choice of his or her partner. Briefly, the structure of the payoffs in the prisoner’s dilemma can be explained as follows.1 In this discussion, C refers to a cooperative Experimental Studies 211 action and D to a noncooperative action. A combination of the two letters indicates the joint actions for both parties, as typically represented in matrix form. Thus CD is the outcome when person 1 cooperates and person 2 defects;. CC represents the situation...