DP4378 Trust and Trustworthiness Among Europeans: South-North Comparison

Author(s): Fabian Bornhorst, Andrea Ichino, Karl Schlag, Eyal Winter
Publication Date: May 2004
Keyword(s): european regions, experiments, trust, trustworthiness
JEL(s): C70
Programme Areas: Labour Economics, Public Economics
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=4378

This Paper discovers significant differences between southern and northern Europeans in a dynamic version of the ‘trust game’ played by Ph.D. students from different nationalities at the European University Institute. Our version of the trust game allows subjects to choose the receivers to whom they make transfers. Southerners are discriminated against, particularly in terms of contacts and mainly by northern subjects. Strikingly, this discrimination builds up rather than dying out with experience. More than for not being trustworthy (i.e. having a low propensity to reciprocate by making a generous payback for a transfer received), Southerners are being punished for their own low level of trust (i.e. having a low propensity to contact another player with a generous transfer), and for this reason end up leaving the game with lower pay-offs.