Trust, Reciprocity, and a Preference for Economic Freedom: Experimental Evidence

21 Pages Posted: 9 Feb 2013 Last revised: 3 Jul 2013

See all articles by Bryan C. McCannon

Bryan C. McCannon

Illinois Wesleyan University

Jeffery H. Peterson

Saint Bonaventure University

Date Written: June 26, 2013

Abstract

Do those who prefer economic freedom behave differently than those who prefer public intervention to perceived problems? Experiments of the Trust Game and Dictator Game are employed to measure an individual’s behavior. Additionally, a quiz assessing an individual’s preference for private solutions to potential market failures is administered. While trusting investments are driven mostly by one’s preference to reciprocate, it is found that the reciprocation is highest for those who score both very high and very low on the economic freedom assessment. In the Dictator Game, there is a strong inverse relationship between one’s preference for economic freedom and altruistic giving. Thus, those with a strong preference for government intervention in markets exhibit altruism and inequality aversion in their behavior, while those with a strong preference for economic freedom give only in response to trusting, wealth-generating investments.

Keywords: Dictator Game, economic freedom, experiment, market failure, trust, Trust Game, reciprocation, social preference

JEL Classification: C72, C91, D63

Suggested Citation

McCannon, Bryan C. and Peterson, Jeffery, Trust, Reciprocity, and a Preference for Economic Freedom: Experimental Evidence (June 26, 2013). Available at SSRN: https://ssrn.com/abstract=2213505 or http://dx.doi.org/10.2139/ssrn.2213505

Bryan C. McCannon (Contact Author)

Illinois Wesleyan University ( email )

P.O. Box 2900
Bloomington, IL 61702-2900
United States

HOME PAGE: http://sites.google.com/site/bryancmccannon

Jeffery Peterson

Saint Bonaventure University ( email )

Saint Bonaventure, NY 14778
United States
716-375-2082 (Phone)

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