This thesis investigates differences between cultures concerning trust and trustworthiness among the participants of the experiment. It compares data from a collectivism country like India with a more individualistic country like the United States.
Situations like returning money borrowed from a friend, receiving the planned and paid medical treatment in a hospital, being a motivated employee as claimed in the interview, spending money for a project as promised at the charity or choosing a reliable supply firm are examples where trustworthiness (TWN) might occur. Trust is seen as a fundamental requirement of a growing and successful economy; hence, trustworthiness is also an indispensable part. Some might claim that trustworthiness comes from trust, while others, like Hardin for example, go a step further and see trustworthiness as the reason for trusting. Others, like Chauduri and Gangadharan, consider trustworthiness more important than trust. Hence, additional knowledge about what impacts trustworthiness, could be helpful in peoples’ everyday life as well as in the economy.
Table of Contents
1 Introduction and motivation
2 Theoretical background
2.1 Trustworthiness
2.1.1 Behavioural economics
2.1.2 Trust Game
2.1.3 Distinction between TWN and Reciprocity
2.1.4 Relevance of TWN in group decisions across cultures
2.2 Culture
2.2.1 Measurement of Culture – Overview
2.2.2 The IND/COL - Scale
2.3 Relation between TWN and culture
3 The experiment
3.1 The experimental design
3.2 Trust Game incentives
3.3 Annotations
4 Results
4.1 The sample
4.2 Results IND/COL-Scale
4.3 Results TWN
4.4 Hypotheses
5 Discussion
Research Objectives and Themes
This thesis investigates the impact of collectivism and individualism on trust and trustworthiness when managing group assets, specifically examining whether cultural background influences decision-making behavior in the U.S. and India. The core research question addresses how individual versus group-based decision-making contexts affect returned fractions in a Trust Game.
- The influence of cultural orientation (individualism/collectivism) on trustworthiness.
- Experimental analysis of trust and reciprocity in group decision-making.
- Comparative study between the U.S. and Indian cultural contexts.
- Evaluation of the validity of the IND/COL-Scale in cross-cultural research.
- Impact of socio-demographic variables and religiosity on economic decision-making.
Excerpt from the Book
2.1.2 Trust Game
The Trust Game (TG), also known as the investment game (Berg et al. (1995)), is a decision task used to measure trust and trustworthiness in economic contexts. The best-known Trust Game is the one played by Berg et al. (1995). They investigated what factors (e.g. social history) might have an impact on the probability of the presence of trust and trustworthiness in economic decisions. Berg et al. has found evidence that the game-theoretic predictions do not always hold. In their study more than 90% of the participants deviated from the equilibrium. The TG has been replicated several times, for instance by Burks et al. (2002), often for the purpose of comparing the results of Berg et al. to those from a TG with varying modifications of the experimental design.
The TG as in Berg et al. (1995) works as follows: two players are endowed with a certain amount of money or a money equivalent. One player is assigned the role of the investor, the other the role of the trustee. First Player A, the investor, has to decide whether he wants to invest in Player B or not. Player B, the trustee, receives the amount multiplied by a number bigger than 1. In a second step Player B has to decide whether he returns a certain amount or not. The game in its original form is a one-shot sequential game, which means that it is played only once and decisions are made consecutively. Any interaction or communication between A and B is prohibited. The current interpretation is the following: the higher the invested amount sent by Player A, the higher the trust Player A places on an opponent party, and likewise, the higher the back transfer of Player B the more trustworthy or reciprocal he is, depending on which information Player B receives.
Summary of Chapters
1 Introduction and motivation: This chapter defines trustworthiness and establishes the research question regarding the relationship between collectivism, individualism, and trust in group asset management.
2 Theoretical background: This section provides a foundation by reviewing behavioral economics, the Trust Game mechanism, cultural measurement scales, and the intersection of culture with trustworthy behavior.
3 The experiment: The chapter details the methodology of the online experiment conducted via mTurk, describing the experimental design, incentives, and the specific Trust Game task used for data collection.
4 Results: This chapter presents the statistical analysis of the experimental data, covering sample demographics, IND/COL-Scale results, and the testing of various research hypotheses.
5 Discussion: The final chapter interprets the findings, addresses the lack of significant cultural differences in behavior, and explores the impact of alternative factors like religiosity on trustworthiness.
Keywords
Trustworthiness, Collectivism, Individualism, Trust Game, Behavioral Economics, Cultural Orientation, Group Assets, Reciprocity, India, United States, Social Preferences, IND/COL-Scale, Religiosity, Decision-making, Experimental Economics
Frequently Asked Questions
What is the core focus of this bachelor thesis?
The thesis explores the influence of collectivist and individualist cultural orientations on trustworthiness, specifically when individuals manage financial assets on behalf of a group.
What are the primary themes discussed in this research?
The work covers behavioral economics, the definition and measurement of culture using the IND/COL-Scale, social identity theory, and the role of religiosity in economic decisions.
What is the central research question?
The research asks how collectivism and individualism relate to trust and trustworthiness when an individual has to manage the assets of a group rather than just their own.
Which scientific methodology was utilized?
The author employed an experimental approach, conducting an online Trust Game on Amazon Mechanical Turk with participants from the U.S. and India, combined with OLS regression models to analyze the data.
What topics are covered in the main body?
The main body discusses theoretical foundations, the experimental design, the statistical analysis of Trust Game results, and hypothesis testing regarding cultural and individual differences.
Which keywords best characterize this study?
Key terms include trustworthiness, collectivism, individualism, Trust Game, social preferences, and cross-cultural experimental analysis.
How does the experimental group head treatment work?
Participants played as group heads where their decisions affected the financial outcomes of three other randomly assigned group members, allowing the author to test for differences in behavior compared to individual decision-making.
What were the major findings regarding the influence of culture?
The data surprisingly showed no significant differences between U.S. and Indian participants regarding trustworthiness, suggesting that current cultural distinctions might be less predictive of economic behavior than expected.
What role does religiosity play in the results?
The regression analysis indicated that religiosity may be a more potent predictor of trustworthy behavior than cultural orientation, with religious participants displaying different return patterns compared to non-religious ones.
- Quote paper
- Elvira Tafarrohi (Author), 2015, The influence of collectivism on trustworthiness when managing the assets of a group, Munich, GRIN Verlag, https://www.grin.com/document/430949
