Trust and Trustworthiness in Anonymous Virtual Worlds

Virtual communities like Second Life represent an economic factor with increasing potential, but may induce behavior that deviates from real world experience. We introduce a new experimental design that is based on the trust game (Berg, Dickhaut, and McCabe 1995), but eliminates the problem of multiple virtual identities. We conduct one treatment of the experiment in the virtual world Second Life and compare the results to the First Life control treatment that we conduct on our university Campus. In Second Life, we find significantly lower investment levels, but significantly higher average returns than in our First Life treatment or in the literature. The lower investments may be due to the fact that the return schedules observed in Second Life are significantly more erratic than in First Life.