Intertemporal Trust Game

Abstract

We experimentally investigate the effect of timing of implementation of decisions on trust and trustworthiness. In the “Now” treatment, a standard trust game is run and subjects receive payment in the same date of the experiment. In the “Later” treatment, subjects make decisions in the same date as the now treatment, while the decisions are implemented (and hence payment) in a week. The later treatment captures a key feature of social interactions where decisions are often implemented in the future rather than immediately. Consistent with our model, we find that both trust and trustworthiness are lower in the later treatment. Our result thus suggests that individuals who discount utility from altruism to a larger extent than utility from monetary payoff will have less incentive to trust or be trustworthy when the decision is implemented with a delay.

Keywords: time preference, social norms, experiment

JEL Classification: D64, C91