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 Q&A
Iris Bohnet: Trust Is Worthy
TRUST US ON THIS ONE: Professor Iris Bohnet knows how to trust. She should: she’s been studying the elusive topic for the past four years. Now, in a new research paper co-written with PhD student Kessely Hong, the Swiss-born behavioral economist digs further, looking at how one factor in our inclination to trust or distrust is our status in society. In October, she sat down with Update to talk about her findings.
Why does trust interest you?
Trust is central to any kind of social interaction, whether you think of market or government interactions or negotiations.Trust is basic. Economists believe that trust decreases transaction costs. Business would run more smoothly if we all trusted each other. We wouldn’t have to write contracts. We could all shake hands. In that sense, trust would be good for the economy and
for government. There’s a lot of empirical evidence that, in fact, countries where people are more likely to trust each other grow faster and have higher per capita income.
What makes your work on trust different than what’s been done before?
The biggest difference is methodological. Earlier research used surveys. They asked people whether they would normally trust “others.” The problem with that question is we don’t know what “others” means. For an American, “others” may be thousands of people they have met in their lives. For a woman in Saudi Arabia, where we will run our studies soon, it may only be 10 to 20 people. I don’t trust those trust measures. We’re trying to measure trust behaviorally. We run games with people in which we never use the word trust. People don’t know it’s about trust so they’re not trying to give the socially desirable answer.
Games?
A typical trust game could look something like this: two people come to my study. One person gets $10 and is asked how much she wants to pass along to a second person whom she doesn’t know. Any amount she passes along is going to be tripled by me. For example, if she gives $10, the second person gets $30. Then, the second person is asked how much he wants to give back. If
he were trustworthy, he would return at least half of what he received, so that they’d both go home with $15.
Why money?
That’s a way for us to measure trust without using the word trust. For economists, it’s really important to provide real incentives in the laboratory. In surveys, we can say things like, “Trust is cool,” but “talk may be cheap” and words may mean something else for different people.
But do people trust differently when it comes to money? Are you more trusting of your neighbor to hold your cat than your ATM card?
There are two answers to that. One is, I can’t be sure. The second is, even in the cat example, as an economist, I would try to measure value monetarily. What value do you derive from the cat, say, compared to your car? Assume you value the cat at $5,000. The cat dies. That would hurt you. It would feel like losing $5,000. We’re not saying this is perfect, but it’s better than playing with chocolate. We would be nervous that chocolate is more varied in how we value it compared to how we value dollars.
Vulnerability has something to do with this?
Yes. We’re arguing that your willingness to trust has something to do with your willingness to be vulnerable. People may not trust because they don’t want to lose money and/or because they hate being betrayed by other people, they are betrayal averse.
Gender and age affect this aversion?
WOMPs — white, older, male, Protestants — behave significantly differently than their counterparts — minorities, younger people, women, and non-Protestants. WOMPs traditionally are associated with having higher status in the United States. For lower-status groups, payoff comparisons explain everything. Those with less power can’t afford to lose money. The higher-status groups, the WOMPs, don’t care about that at all, but they really hate being betrayed. This pattern applies even when we control for income.
Where is distrust pervasive?
Scandinavians are most likely to trust. People in developing countries typically are least likely to trust. Americans are in-between. I’ve done research in the United States, Switzerland, the UK, South Africa, Russia, and the United Arab Emirates. In joint work with Richard Zeckhauser, we find, for example, that people in the United Arab Emirates are extremely betrayal averse.
Can people trust too much?
I’m actually more concerned with “under-trust” than “over-trust.” People generally do not trust enough. The world is a better place than they think it is and they could afford to trust a bit more.
To download the full copy of Bohnet’s report: http://ksgnotes1.harvard.edu/Research/wpaper.nsf/pubwzAuthor
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