Behavioural differences and countries divide - trust, risk and altruism in Italy, Germany and UK
The economic literature has shown that within country divides and differences often correlates with differences in individuals’ preferences. However, few studies have assessed different aspects of preferences of subjects from distinct regions in a consistent framework. In this study we consider three countries characterised by internal divides and comprehensively assess how a subjects’ macro area of origin affects individuals’ pro-social preferences, trust and risk attitudes. We furthermore assess how information about others’ identity affects subjects’ preferences. Using a representative sample from Italy, Germany and the United Kingdom, we conduct an experiment where participants sequentially play three different games: a trust game, a dictator game and a risk task. In line with the literature, our results show differences in trust within countries, with higher trust observed towards subjects that are geographically closer. In Italy subjects from the South trust more subjects from the South, while in Germany trust in the West and East is higher when the matched player is from the same macro area. In the UK instead we find that trust is higher amongst subjects from the exact same region. Our results also show differences in risk taking between North and South of Italy and East and West of Germany. Specifically, we observe lower risk taking amongst subjects from the South of Italy and East of Germany. However, when risk taking benefits an in-group we observe that subjects from the South of Italy become significantly more likely to take risk. In Germany, risk taking is higher when participants from the West are matched to play with other participants from the West. These results are in line with our measure of in-group altruism in the three countries. In Italy and the UK we find that subjects from the South give more when matched to play with someone from the South. Similarly in Germany, participants from the West engage in more altruistic behaviours when playing with subjects from the same macro area.