Submission 56
Signals of Trust: How Institutional Arrangements Shape Cooperation Across Contexts
PS2-G07-02
Presented by: Joshua Doyle
Signals of Trust: Institutional Incentives and Their Behavioral Consequences in Cooperation Games
Institutions play a critical role in promoting cooperation by incentivizing other-regarding behavior through rewards and punishments. However, recent research suggests that such institutional arrangements may also influence how individuals perceive the trustworthiness of others. Specifically, the presence of external mechanisms to induce cooperation can lead actors to infer that trust is inherently fragile, requiring reinforcement through sanctions or rewards. While prior studies have examined trust and cooperation within singular institutional contexts, less is known about how experiences with one institutional arrangement might "spill over" into unrelated settings. This study explores whether institutional arrangements in one context affect subsequent cooperative behavior in a new, institutionally distinct situation.
Building on the foundational work of Fehr and Rockenbach (2003), this study manipulates institutional incentives within a trust game and observes their downstream effects in a public goods game. Participants first will complete a survey measuring generalized social trust and attitudes toward fairness. They are then introduced to the trust game, where they play the role of Player B, while Player A is controlled by an algorithm programmed to signal varying levels of trust. Participants are assigned to one of three conditions: (1) no punishment option, (2) punishment enabled and exercised, or (3) punishment enabled but not exercised. In a second dimension of variation, Player A transfers either 70% or 0% of their endowment, signaling trust or mistrust. This creates six experimental conditions designed to examine how the combination of trust signals and institutional incentives influences cooperative behavior.
The dependent variable is measured using a public goods game, where participants decide how many tokens to contribute to a group account shared with new, anonymous partners. By introducing this game after the trust game, we investigate whether institutional experiences in the initial game shape expectations and behaviors in subsequent, unrelated cooperative contexts. Socio-demographic and attitudinal variables are collected as covariates to explore potential moderators of the observed effects.
I propose the following hypotheses for this study: H1: participants in Condition 2 will exhibit the lowest contributions, H2 those in Condition 3 the highest, H3 those in Condition 1 higher than 2 and lower than 3 in the public goods game. We expect that social trust will moderate the effect of experimental conditions on cooperation.
This study has the potential to contribute to the literature by extending the concept of behavioral spillovers between institutional settings and highlighting the dual role of institutional arrangements as both facilitators of cooperation and signals of trustworthiness.
Institutions play a critical role in promoting cooperation by incentivizing other-regarding behavior through rewards and punishments. However, recent research suggests that such institutional arrangements may also influence how individuals perceive the trustworthiness of others. Specifically, the presence of external mechanisms to induce cooperation can lead actors to infer that trust is inherently fragile, requiring reinforcement through sanctions or rewards. While prior studies have examined trust and cooperation within singular institutional contexts, less is known about how experiences with one institutional arrangement might "spill over" into unrelated settings. This study explores whether institutional arrangements in one context affect subsequent cooperative behavior in a new, institutionally distinct situation.
Building on the foundational work of Fehr and Rockenbach (2003), this study manipulates institutional incentives within a trust game and observes their downstream effects in a public goods game. Participants first will complete a survey measuring generalized social trust and attitudes toward fairness. They are then introduced to the trust game, where they play the role of Player B, while Player A is controlled by an algorithm programmed to signal varying levels of trust. Participants are assigned to one of three conditions: (1) no punishment option, (2) punishment enabled and exercised, or (3) punishment enabled but not exercised. In a second dimension of variation, Player A transfers either 70% or 0% of their endowment, signaling trust or mistrust. This creates six experimental conditions designed to examine how the combination of trust signals and institutional incentives influences cooperative behavior.
The dependent variable is measured using a public goods game, where participants decide how many tokens to contribute to a group account shared with new, anonymous partners. By introducing this game after the trust game, we investigate whether institutional experiences in the initial game shape expectations and behaviors in subsequent, unrelated cooperative contexts. Socio-demographic and attitudinal variables are collected as covariates to explore potential moderators of the observed effects.
I propose the following hypotheses for this study: H1: participants in Condition 2 will exhibit the lowest contributions, H2 those in Condition 3 the highest, H3 those in Condition 1 higher than 2 and lower than 3 in the public goods game. We expect that social trust will moderate the effect of experimental conditions on cooperation.
This study has the potential to contribute to the literature by extending the concept of behavioral spillovers between institutional settings and highlighting the dual role of institutional arrangements as both facilitators of cooperation and signals of trustworthiness.