Trust and Cooperation : Survey Evidence and Behavioral Experiments

Most of the empirical research on the role of trust as a determinant for economic prosperity relies on survey measured indicators for trust. In this chapter I discuss a number of studies providing microfoundations of the link between survey measured trust and cooperative behavior in controlled experiments. Cooperative behavior is measured using the public goods game, while trust is measured by standard questionnaire items. The results suggest that the most frequently used survey item on trust correlates with a preference for making the trusting move. In contrast, a different survey item on fairness is a strong predictor for a person's expectations about the other's trustworthiness. Applied to a cross-cultural perspective I discuss the radius of trust problem and investigate the role of in-group and out-group trust. In a repeated public goods game I find that out-group trust predicts cooperation in the first round of the game, whereas towards the end of the game in-group trust seems to gain importance