Trust Games: Game-Theoretic Approaches to Embedded Trust.

Abstract

This article offers an overview of different variants of trust games and shows how game-theoretic modeling can contribute to an analysis of conditions for placing and honoring trust in such games. The focus is on explaining trust rather than on explaining consequences of trust for individual behavior or for outcomes such as societal cohesion or economic prosperity. Specifically, game-theoretic modeling allows for analyzing how the “embeddedness” of trust games in long-term relations between actors and in networks of relations can be a basis for informal norms and institutions of trust. Game-theoretic modeling also allows for analyzing actors’ incentives to modify embeddedness characteristics so that informal norms and institutions of trust become feasible. We discuss how game-theoretic models can be used to derive testable predictions for experiments with trust games and sketch empirical evidence from such experiments.