A game-theoretic model of reciprocity and trust that incorporates personality traits

Ricardo Guzmán, Rodrigo Harrison, Nureya Abarca and Mauricio Villena

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), 2020, vol. 84, issue C

Abstract: We propose a game-theoretic model of reciprocity and trust that incorporates personality traits. In the model, positive and negative reciprocity are “reciprocal preferences:” parameters of heterogeneous utility functions that take into account the material welfare of others (positively if they have been kind, negatively if they have been hostile). Trust, on the other hand, is an individual bias that distorts probabilistic beliefs about the trustworthiness of others. Unlike typical game-theoretic models, our model provides an explanation for the heterogeneity of preferences and probabilistic beliefs: a person’s personality traits determine both the parameters of his utility function and the magnitude of his beleif bias. We tested the model experimentally. Subjects completed a psychometric questionnaire that measures three personality traits: positive reciprocity, negative reciprocity, and trust. Subsequently, they played a sequential prisoner’s dilemma with random re-matching and payoffs changing from round to round. From the subjects’ psychometric scores and game behaviors we inferred the relationship between reciprocal preferences, belief biases, and personality. The results confirmed the hypotheses of the model.

Keywords: Reciprocity; Trust; Personality; Psychometrics; Revealed preferences (search for similar items in EconPapers)
JEL-codes: C72 C92 D03 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:soceco:v:84:y:2020:i:c:s2214804319301788

DOI: 10.1016/j.socec.2019.101497

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