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Trust -'It is happier to be sometimes cheated than not to trust'
Samuel Johnson in The Rambler (1750) Consider the situation as set out below: This is a game with two players. Initiator starts off with a sum of money, say £100. They can send some or all of it to the responder. Any money that is sent will be tripled on its way to them. E.g. if the initiator sends them £1, the responder will receive £3. If the initiator sends them £10, the responder will receive £30 etc. The initiator can send the responder any amount they wish. If the responder receives any money from the initiator, they will have a choice to send some, none, or all of it back to the initiator. (The responder will have 3 times what the initiator sent them.) They can send back any amount that they wish to the initiator. (Note: whatever they send back will not be tripled again) As the initiator how much money would you send knowing that the amount would be tripled in transmission but the responder can send back any amount they wish? In a culturally mixed audience at the London Business School, as expected, there was a variety of answers, ranging from zero (the risk specialists much chastened by recent experience) to the full £100 (about 20% of the audience of 40 or so). Take a moment to consider what you would do? Results from experiments with $10 and $20 (M.M. Pillutla et al- Journal of Experimental Social Psychology 39 (2003) 448-445) show a clear conclusion. The more you send then on average the better off you are (For these relatively trivial amounts of money). If you fully trust the other party then that trust begets reciprocity. Trusting actions that were quick (and therefore seen as spontaneous) were more likely to be reciprocated than those that are not. Trust was highest when cooperation was not the result of a contract (Malhotra & Murnighan, 2002) Some conclusions from the Professor Pillutla
Ray Atkinson Managing Director |
