Trust in Private and Common Property Experiments

We report the results from a series of experiments designed to investigate behavior in two settings that are frequently posited in the policy literature as generating different outcomes: private property and common property. The experimental settings closely parallel earlier experimental studies of the investment or trust game. The primary research question relates to the effect of the initial allocation of property rights on the level of trust that subjects will extend to others with whom they are linked. We find that assigning the initial endowments as common property of each of N pairs of a first mover and second mover leads to marginally greater trust than when the initial endowments are fully owned by the two individual movers as their respective private property. Subjects’ decisions are also shown to be correlated with attitudes toward trust and fairness that are measured in post-experiment questionnaires.