Building Trust—One Gift at a Time

Abstract

This paper reports an experiment evaluating the effect of gift giving on building trust. We have nested our explorations in the standard version of the investment game. Our gift treatment includes a dictator stage in which the trustee decides whether to give a gift to the trustor before both of them proceed to play the investment game. We observe that in such case the majority of trustees offer their endowment to trustors. Consequently, receiving a gift significantly increases the amounts sent by trustors when controlling for the differences in payoffs created by it. Trustees are, however, not better off by giving a gift as the increase in the amount sent by trustors is not large enough to offset the trustees' loss associated with the cost of giving a gift.

Definition of Trust as a Catalyst and the Implications Therefrom: A Deduction from a Literature Review

“…The process of establishing trust can be eased by social embeddedness (Cook, 2005), previous cooperation and experience (Bornhorst, Ichino, Kirchkamp, Schlag, & Winter, 2010;Fletcher & Peters, 1997;Gonzalez del Campo, Pardo, & Perlines, 2013). Establishing trust can be influenced by emotions (Chen & Ayoko, 2012;Lewis & Weigert, 1985), concessions (Servatka, Tucker, & Vadovic, 2011), competency (Cognitive trust), and on observed behavior that relies on conformity with socially accepted norms (affective trust) (Chua, 2012). However, concern for others' behavior and attribution of honesty is a major influence on social behavior (Jones & Paulhus, 2017).…”