Guidance on Answers:
The answers do not need to include any dates, numbers or specific words. What you will be tested
on is on whether you were able to take in the general ideas and conclusions that can be made from
the papers that we went through. What is listed below is only an outline of the answer, bullet point
answers are not acceptable!
Question 6 (from Trust and Reciprocity questions):
How does Cox (2004) identify the effect of trust and altruism?
Outline of Answer:
The absolute basic answer should include what the experiment was investigating and what their
subject pool is – this would not be enough for passing:
Cox recognises the confounding present in conclusions drawn from the trust game. To separate the
two effects a three game experiment is utilised. Student participants that were randomly recruited.
For a good grade the answer needs to list the different tasks and procedures of the experiment:
Three treatments:
Treatment A: Individuals are either first or second movers. They play the trust game where transfers
made by first mover are tripled when received by the second mover.
Treatment B:
A dictator game where second mover individuals have no decision to make; hence no opportunity to
return any transfers back.
Treatment C:
The second part of the trust game is only played; only second movers make a decision.
Discriminating trust or reciprocity and other-regarding preferences:
Since in B second movers have no decision to make, the transfers made by first movers have no trust
motivation and are purely a result of other-regarding preferences. Difference of first mover transfers
between A and B gives Trust.
In treatment C, first movers cannot send any money to second movers, hence transfers cannot be
motivated by positive reciprocity. Difference between second mover transfers between A and C
gives reciprocity.
Results:
Find that after controlling for other-regarding preferences (using their triadic design) they can still
find evidence of trust and positive reciprocity as motivation for participants playing the trust game.