Larissa B ătrâncea Universitatea Babeş-Bolyai, Romania Anca Nichita

1. “We are all born brave, trusting and greedy, and most of us remain greedy.”Mignon McLaughlin (1966)

2. Trust and Trustworthiness among Romanians Larissa Bătrâncea Universitatea Babeş-Bolyai, Romania Anca Nichita Universitatea Babeş-Bolyai, Romania IAREP/SABE/ICABEEP CONFERENCE Higher School of Economics 1-3 September, Moscow 2010

3. World Value Survey Data Table 6. “Trust in completely strangers” levels www.wvsevsdb.com

4. The link between trust reported in surveys and economic growth • Knack & Keefer (1997): find empirical support that trust positively affects growth rates, based on World Value Survey question • Zak & Knack (2001): income inequality and ethnic diversity affect trust on a national level

5. Motivation To compare trust and trustworthiness levels with those in other countries (i.e. Bulgaria, USA) Koford (2003):compares results with Berg, Dickhaut & McCabe (1995) data; Bulgarians had higher levels of trust and trustworthiness, leaving the game with more money than the Americans did Cox (2004):American subjects display high levels of trust and trustworthiness To identify differences between data reported in surveys (World Value Survey) and economic behavior

6. Motivation To study the influence of gender on economic decisions Chaudhuri & Gangadharan (2002):males were more altruistic in the role of senders Buchan & Croson (2004):gender didn’t influence senders transfer intentions; in turn, female receivers stated to be more trustworthy than men did Buchan, Croson & Solnick (2008):males showed more trust than females; females were more trustworthy

7. Research Questions: 1)What are the trust and trustworthiness levels in Romania? 2) Does gender influence subjects‘ behavior? 3) What is the relationship between experimental data and survey data?

8. Experimental Design

9. Subjects from rooms A and B are paired randomly Room A RoomB

10. Each subject in roomA receives an endowment of 10 lei. RoomA 10lei

11. Each subject in roomA decides how much of the 10 lei to sent her partner in room B n lei RoomA RoomB

12. The amount sent is tripled nx3 Room A Room B

13. Each subject in room B decides whether to return something to her partner in room A RoomA Room B r lei

14. At the end of the game First mover’s earning = 10 – n + r Second mover’searning= 3 x n - r

15. Hypotheses • Trust and trustworthiness levels in Romania differ from those in other countries • Gender influences economic behavior • There is a difference between survey data and experimental data

16. Subject pool sample • Gender: 39 females, 27 males • Age: between 20 and 22 • Education: undergraduate students in Economics • Number of participants: 68

17. FEED-BACK FROM SUBJECTS “This experiment has thought me that, if you are a businessman, you cannot make a decision without taking your partner into account.” “Experiments like this should be organized more often, because students actually learn how to handle their potential business partners and what to expect from them.” “This is a useful experience. It teaches you whom and how much to trust, in the likelihood of starting a business deal in the future.” “What a fool! Had he given me more, we both would have been better off.”

18. Average transfers comparison R E S U L T S

19. R E S U L T S

20. Transfer Patterns R E S U L T S Senders Receivers

21. Gender effects on transfers R E S U L T S • 1. Senders transfersOLS: gender does not influence transfers ( t = 0,736; p = 0,467)2. Receivers transfersOLS: gender does influence transfers ( t = 1,843; p = 0,075)

22. …back to the World Value Survey R E S U L T S

23. Instead of conclusions, …Crossroads of thoughts

24. Open questions How do we explain the difference between high levels of trust found through experimental games in Eastern Europe and low levels of trust reported by surveys (World Value Survey)? Does the trust game really measure trust?

25. Thank you!