The Cultural Transmission of Trust Norms: Evidence from a Lab in the Field on a Natural Experiment

Abstract

We conduct trust games in three villages in a northeastern Romanian commune. From 1775-1919, these villages were arbitrarily assigned to opposite sides of the Habsburg and Ottoman/Russian border despite being located seven kilometers apart. All three empires were ruled by outsiders to Romania, with Russian and Ottoman fiscal institutions being more rapacious. We conjecture that this history contributed to a culture of mistrust of outsiders (relative to co-villagers). Our design permits us to test this conjecture, and more generally, whether historically-derived cultural norms are transmitted intergenerationally. We find that participants on the Ottoman/Russian side that also have family roots in the village are indeed less likely to trust outsiders but more likely to trust co-villagers.

Keywords: trust, trust game, culture, cultural transmission, natural experiment, field experiment, laboratory experiment, norms, Romania, Austria, Ottoman Empire, Habsburg Empire

JEL Classification: C91, C93, N33, O17, Z1