DP7717 Similarities and Differences when Building Trust: the Role of Cultures

Author(s): Fabian Bornhorst, Andrea Ichino, Oliver Kirchkamp, Karl Schlag, Eyal Winter
Publication Date: February 2010
Keyword(s): European regions, experiments, Trust, trustworthiness
JEL(s): C91, C92, Z13
Programme Areas: Public Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=7717

We run an experiment in which students of different European nationalities are matched in groups of five and repeatedly choose with whom within their group they want to play a trust game. Participants observe of each other age, gender, nationality and number of siblings. The region of origin, "North" or "South" is a major determinant of success in the experiment. Participants tend to trust those they trusted before and who trusted them. We do not find evidence of regional discrimination per se. It is only the underlying and significant differences in behavior that translate through repeated interactions into differences in payoffs between the two regions.