Trust and Trustworthiness in Times of Crisis

Abstract

This paper addresses the impact of a crisis situation on trust and trustworthiness in the laboratory. The experiment is based on an adapted version of the trust game by Berg et al. (1995) and tries to shed light on the question if crisis situations affect trust relationships. Analyzing experimental data from 384 observations collected at the University of Passau, I find strong evidence that crises do not directly affect trust behavior. However, the results show that the relationship between crisis and trust is mediated: crises have a strong impact on expectations on the counterpart’s trustworthiness which in turn influence the amount of trust exhibited. The data also reveals an interesting gender aspect: female subjects prove to be significantly less trusting and less trustworthy than their male counterparts.

Keywords: trust, trustworthiness, crisis, experiment, trust game, expectations, mediation, gender, laboratory

JEL Classification: C91, C92, D63