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SFB 504 discussion paper No. 04-43:

How do People Play a Repeated Trust Game? Experimental Evidence

Fabian Bornhorst, Andrea Ichino, Oliver Kirchkamp, Karl H. Schlag, Eyal Winter


We run an experiment in which participants are matched to a group of five and repeatedly have to choose with whom within their group they want to play a trust game. Within this group participants observe of each other age, gender, nationality and number of siblings. We find that difference in success in the experiment can only be explained in terms of regional membership, belonging to northern or southern Europe. Compared to “South”, “North” show more trust in periods when trust is rewarded with sufficiently high trustworthiness and show less trustworthiness at the margin apart from the first period. Differences in behavior that generate higher payoffs-as opposed to discrimination-explain substantial differences in success between the two regions. .