May 18, 2009

Cultures of Kindness: A Meta-Analysis of Trust Game Experiments

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We  collect  data  on  trust  and  trustworthy  behavior from  eighty-four  iterations  of  the Berg,Dickhaut, and McCabe Investment game (the “trust” game).   We perform a meta-analysis ofthese games in order to identify the effect of experimental protocols and cross-country culturaldifferences on trust and trustworthiness.  We find that approximately 40% of the variance in trustand 30% of the variance in trustworthiness is explained by changes to experimental protocols.We also find that cultural variables that are highly correlated with a country’s stock of socialcapital, such  as  ethnic  fractionalization  and  income  inequality,  are  most  closely  related  totrustworthiness rather than trust.  We use these findings to show that the negative relationshipbetween  diversity  and social  capital  disappears  as  competitive  free  markets  become  moreprevalent in a country.