Is Trust a Risky Decision?

Abstract:     
In a series of laboratory experiments that focus on a two-person sequential, binary trust game, we examine the relationship between risk attitudes and the decision to trust an anonymous partner. Our experiments include two behavioral risk measures and one survey measure of risk attitudes in addition to the trust game. We find no statistical relationship between the behavioral risk measures and the decision to trust. With additional control variables, there is a weak relationship between risk measured from the survey and the decision to trust.

Number of Pages in PDF File: 19

Keywords: Bargaining Games, Trust, Risk Aversion, Laboratory Experiments

JEL Classification: C9, D81, Z13

Accepted Paper Series