Can Observers Predict Trustworthiness?

Michèle Belot, V Bhaskar and Jeroen van de Ven ()

The Review of Economics and Statistics, 2012, vol. 94, issue 1, 246-259

Abstract: We investigate whether experimental subjects can predict behavior in a prisoner's dilemma played on a TV show. Subjects report probabilistic beliefs that a player cooperates, before and after the players communicate. Subjects correctly predict that women and players who make a voluntary promise are more likely to cooperate. They are able to distinguish truth from lies when a player is asked about her intentions by the host. Subjects are to some extent able to predict behavior; their beliefs are 7~percentage points higher for cooperators than for defectors. We also study their Bayesian updating. Beliefs do not satisfy the martingale property and display mean reversion. © 2011 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Date: 2012
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