Hostname: page-component-78c5997874-xbtfd Total loading time: 0 Render date: 2024-11-19T14:47:33.417Z Has data issue: false hasContentIssue false
  • English
  • Français

Trust, reciprocity, and a preference for economic freedom: experimental evidence

Published online by Cambridge University Press:  11 March 2014

BRYAN C. MCCANNON
BRYAN C. MCCANNON*
Affiliation:
Saint Bonaventure University, Saint Bonaventure, NY, USA
*
*Email: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract:

Do those who prefer economic freedom behave differently than those who prefer government intervention? Experiments of the Dictator and Trust games are studied. A survey elicits preference for private solutions to potential market failures. Trust and reciprocation are highest for those who score both high and low on the assessment. In the Dictator Game, there is a strong inverse relationship between one's preference for economic freedom and giving. Thus, the results can be interpreted as those with a strong preference for government intervention altruistically give, while those with a preference for economic freedom give primarily in response to wealth-generating investments.

Type
Research Article
Information
Journal of Institutional Economics , Volume 10 , Issue 3 , September 2014 , pp. 451 - 470
Copyright
Copyright © Millennium Economics Ltd 2014 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Adkins, L. C., Moomaw, R. L., and Savvides, A. (2002), ‘Institutions, Freedom, and Technical Efficiency’, Southern Economic Journal, 69 (1): 92–108.Google Scholar
Anderson, L. R., Mellor, J. M., and Milyo, J. (2004), Do Liberals Play Nice? The Effect of Party and Political Ideology in Public Goods and Trust Games, Irving B. Harris Graduate School of Public Policy Studies, University of Chicago.Google Scholar
Anderson, L. R., Mellor, J. M., and Milyo, J. (2006), ‘Induced Heterogeneity in Trust Experiments’, Experimental Economics, 9 (3): 223–235.CrossRefGoogle Scholar
Ashby, N. J. (2007), ‘Economic Freedom and Migration Flows Between U.S. States’, Southern Economic Journal, 73 (3): 677–697.CrossRefGoogle Scholar
Bar, T. and Zussman, A. (2012), ‘Partisan Grading’, American Economic Journal: Applied Economics, 4 (1): 30–48.Google Scholar
Barr, A. (2003), ‘Trust and Expected Trustworthiness: Experimental Evidence from Zimbabwean Villages’, Economic Journal, 113 (489): 614–630.CrossRefGoogle Scholar
Bengoa, M. and Sanchez-Robles, B. (2003), ‘Foreign Direct Investment, Economic Freedom, and Economic Growth: New Evidence from Latin America’, European Journal of Political Economy, 19 (3): 529–545.CrossRefGoogle Scholar
Berg, J., Dickhaut, J., and McCabe, K. (1995), ‘Trust, Reciprocity, and Social History’, Games and Economic Behavior, 10 (1): 122–142.CrossRefGoogle Scholar
Berggren, N. and Jordahl, H. (2005), ‘Does Free Trade Really Reduce Growth? Further Testing Using the Economic Freedom Index’, Public Choice, 122 (1–2): 99–114.CrossRefGoogle Scholar
Berggren, N. and Jordahl, H. (2006), ‘Free to Trust? Economic Freedom and Social Capital’, Kyklos, 59 (2): 141–169.CrossRefGoogle Scholar
Bjørnskov, C. and Foss, N. J. (2008), ‘Economic Freedom and Entrepreneurial Activity: Some Cross-Country Evidence’, Public Choice, 134 (3–4): 307–328.CrossRefGoogle Scholar
Bohnet, I. and Huck, S. (2004), ‘Repetition and Reputation: Implications for Trust and Trustworthiness When Institutions Change’, American Economic Review, 94 (2): 362–366.CrossRefGoogle Scholar
Bruni, L. and Sugden, R. (2013), ‘Reclaiming Virtue Ethics’, Journal of Economic Perspectives, 27 (4): 141–163.CrossRefGoogle Scholar
Buchan, N. R., Croson, R. A. T., and Dawes, R. M. (2002), ‘Swift Neighbors and Persistent Strangers: A Cross-Cultural Investigation of Trust and Reciprocity in Social Exchange’, American Journal of Sociology, 108 (1): 168–206.CrossRefGoogle Scholar
Campbell, N. D. and Rogers, T. M. (2007), ‘Economic Freedom and Net Business Formation’, Cato Journal, 27 (1): 23–36.Google Scholar
Carlsson, F. and Lundström, S. (2002), ‘Economic Freedom and Growth: Decomposing the Effects’, Public Choice, 112 (3–4): 335–344.CrossRefGoogle Scholar
Carney, D. R., Jost, J. T., Gosling, S. D., and Potter, J. (2008), ‘The Secret Lives of Conservatives and Liberals: Personality Profiles, Interaction Styles, and the Things They Leave Behind’, Political Personality, 29 (6): 807–840.Google Scholar
Cox, J. C. (2004), ‘How to Identify Trust and Reciprocity’, Games and Economic Behavior, 46 (2): 260–281.CrossRefGoogle Scholar
Cox, J. C. and Deck, C. A. (2006), ‘Assigning Intentions When Actions Are Unobservable: The Impact of Trembling in the Trust Game’, Southern Economic Journal, 73 (2): 307–314.Google Scholar
Croson, R. A. T. and Buchan, N. R. (1999), ‘Gender and Culture: International Evidence from the Trust Games’, American Economic Review, 89 (2): 386–391.CrossRefGoogle Scholar
de Haan, J. and Sturm, J.-E. (2000), ‘On the Relationship Between Economic Freedom and Economic Growth’, European Journal of Political Economy, 16 (2): 215–241.CrossRefGoogle Scholar
Delavande, A. and Zafar, B. (2011), ‘Stereotypes and Madrassas: Experimental Evidence from Pakistan’, Federal Reserve Bank of New York Staff Reports, Report No. 51.Google Scholar
Esarey, J., Salmon, T. C., and Barrilleaux, C. (2012), ‘What Motivates Political Preferences? Self-Interest, Ideology, and Fairness in a Laboratory Democracy’, Economic Inquiry, 50 (3): 604–624.CrossRefGoogle Scholar
Farr, W. K., Lord, R. A., and Wolfenbarger, J. L. (1998), ‘Economic Freedom, Political Freedom, and Economic Well-Being: A Causality Analysis’, Cato Journal, 18 (2): 247–252.Google Scholar
Fiedler, M., Haruvy, E., and Li, S. X. (2011), ‘Social Distance in a Virtual World Experiment’, Games and Economic Behavior, 72 (2): 400–426.CrossRefGoogle Scholar
Fitzgerald, C. J. and Wickwire, J. H. (2012), ‘Religion and Political Affiliation's Influence on Trust and Reciprocity Among Strangers’, Journal of Social, Evolutionary, and Cultural Psychology, 6 (2): 158–180.CrossRefGoogle Scholar
Graeff, P. and Mehlkop, G. (2003), ‘The Impact of Economic Freedom on Corruption: Different Patterns for Rich and Poor Countries’, European Journal of Political Economy, 19 (3): 605–620.CrossRefGoogle Scholar
Gwartney, J. D., Holcombe, R. G., and Lawson, R. A. (2004), ‘Economic Freedom, Institutional Quality, and Cross-Country Differences in Income and Growth’, Cato Journal, 24 (3): 205.Google Scholar
Gwartney, J. D., Holcombe, R. G., and Lawson, R. A. (2006), ‘Institutions and the Impact of Investments on Growth’, Kyklos, 59 (2): 255–273.CrossRefGoogle Scholar
Gwartney, J. D., Lawson, R. A., and Block, W., (1996), Economic Freedom of the World: 1975–1995, Vancouver: Fraser Institute.Google Scholar
Gwartney, J. D., Lawson, R. A., and Holcombe, R. G. (1999), ‘Economic Freedom and the Environment for Economic Growth’, Journal of Institutional and Theoretical Economics, 155 (4): 643–663.Google Scholar
HansonII, J. R. II, J. R. (2000), ‘Prosperity and Economic Freedom: A Virtuous Cycle’, The Independent Review, 4 (4): 525–531.Google Scholar
Heckelman, J. C. (2000), ‘Economic Freedom and Economic Growth: A Short-Run Causal Investigation’, Journal of Applied Economics, 3 (1): 71–91.CrossRefGoogle Scholar
Heckelman, J. C. and Stroup, M. D. (2005), ‘A comparison of Aggregation Methods for Measures of Economic Freedom’, European Journal of Political Economy, 21 (4): 953–966.CrossRefGoogle Scholar
Henrich, J., Boyd, R., Bowles, S., Camerer, C., Fehr, E., and Gintis, H. (2004), Foundations of Human Sociality: Economic Experiments and Ethnographic Evidence from Fifteen Small-Scale Societies, Oxford: Oxford University Press.CrossRefGoogle Scholar
Henrich, J., Ensminger, J., Boyd, R., Smith, N. Henrich, Bowles, S., Hill, K., Camerer, C., Gil-White, F., Fehr, E., Gurven, M., Gintis, H., Marlowe, F. W., McElreath, R., Patton, J. Q., Alvard, M., Tracer, D., and Barr, A. (2005), ‘“Economic Man” in Cross-Cultural Perspective: Behavioral Experiments in 15 Small-Scale Societies’, Behavioral and Brain Sciences, 28 (6): 795–814.CrossRefGoogle ScholarPubMed
Hoffman, E., McCabe, K., and Smith, V. (2008), ‘Reciprocity in Ultimatum and Dictator Games: An Introduction’, in Plott, C. R. and Smith, V. L. (eds.), Handbook of Experimental Economics Results, Volume 1, Amsterdam, the Netherlands: North-Holland, pp. 411–416.CrossRefGoogle Scholar
Holm, H. J. and Danielson, A. (2005), ‘Tropic Trust versus Nordic Trust: Experimental Evidence from Tanzania and Sweden’, Economic Journal, 115 (503): 505–532.CrossRefGoogle Scholar
Houser, D., Xiao, E., McCabe, K., and Smith, V. (2008), ‘When Punishments Fail: Research on Sanctions, Intentions, and Non-Cooperation’, Games and Economic Behavior, 62 (2): 509–532.CrossRefGoogle Scholar
Iyer, R., Koleva, S., Graham, J., Ditto, P., and Haidt, J. (2012), ‘Understanding Libertarian Morality: The Psychological Dispositions of Self-Identified Libertarians’, PLOS One, 7 (8): e42366.CrossRefGoogle ScholarPubMed
List, J. A. (2007), ‘On the Interpretation of Giving in Dictator Games’, Journal of Political Economy, 115 (3): 482–493.CrossRefGoogle Scholar
McCannon, B. C. (2014a), ‘Do Economists Play Well With Others? Experimental Evidence on the Relationship Between Economics Education and Pro-Social Behavior’, American Economist (forthcoming).CrossRefGoogle Scholar
McCannon, B. C. (2014b), ‘Born for Finance? Experimental Evidence of the Impact of a Finance Education’, Journal of Behavioral Finance (forthcoming).CrossRefGoogle Scholar
McCloskey, D. N. (2006), The Bourgeois Virtues, Chicago: University of Chicago Press.CrossRefGoogle Scholar
McCloskey, D. N. (2009), ‘Bourgeois Virtues?’, Cato Policy Report, 31 (3).Google Scholar
Nyström, K. (2008), ‘The Institutions of Economic Freedom and Entrepreneurship: Evidence from Panel Data’, Public Choice, 136 (3–4): 269–282.CrossRefGoogle Scholar
Rigdon, M. L., McCabe, K. A., and Smith, V. L. (2007), ‘Sustaining Cooperation in Trust Games’, Economic Journal, 117 (522): 991–1007.CrossRefGoogle Scholar
Slonim, R. and Garbarino, E. (2008), ‘Increases in Trust and Altruism from Partner Selection: Experimental Evidence’, Experimental Economics, 11 (2): 134–153.CrossRefGoogle Scholar
Slonim, R. and Guillen, P. (2010), ‘Gender Selection Discrimination: Evidence from a Trust Game’, Journal of Economic Behavior & Organization, 76 (2): 385–405.CrossRefGoogle Scholar
Sloof, R. and Sonnemans, J. (2011), ‘The Interaction Between Explicit and Relational Incentives’, Games and Economic Behavior, 72 (3): 573–594.CrossRefGoogle Scholar
Storr, V. H. (2009), ‘Why the Markets? Markets as Social and Moral Spaces’, Journal of Markets and Morality, 12 (2): 277–296.Google Scholar
Stringham, E. P. and Levendis, J. (2010), ‘The Relationship Between Economic Freedom and Homicide’, in Gwartney, J., Hall, J., and Lawson, R. (eds.), Economic Freedom of the World: 2010 Annual Report, Vancouver: Fraser, pp. 203–217.Google Scholar
Sutter, M. and Kocher, M. G. (2007), ‘Trust and Trustworthiness Across Different Age Groups’, Games and Economic Behavior, 59 (2): 364–382.CrossRefGoogle Scholar
Vollan, B. (2012), ‘Weird Reciprocity? A ‘Within-Culture Across-Country’ Trust Experiment and Methodological Implications’, Journal of Institutional Economics, 8 (3): 371–397.CrossRefGoogle Scholar