The difference between kinship and friendship: (Field-) experimental evidence on trust and punishment

This paper reports on a one-shot trust experiment with and without third party punishment (TPP). Participants were recruited such that each session contains multiple people who are friends, family members, and unrelated villagers. Participants were either paired with one of their reported family members, a friend or an unrelated villager. The design enables to (1) compare levels of trust and trustworthiness shown to family members vs. friends vs. unrelated villagers, (2) examine the propensity of third parties to punish selfish behaviour exhibited between friends, family members and villagers, and (3) examine the effect potential punishment has on trust and trustworthiness among family, friends and villagers. So far, microeconomic experiments have not investigated kinship in an anonymous way and also its relation to punishment is unknown. Experimental trust and trustworthiness varies between only 20% when playing with a villager and nearly 80% when matched with a family member. TPP significantly increases trust and trustworthiness in interactions among villagers and friends, but TPP is detrimental among family members.