Does trust break even? A trust-game experiment with negative endowments

Abstract

The Trust Game literature is quite extensive; those experimental studies consider situations where a trustor risks an endowment to become wealthier when trustworthiness pays off. In the worst case, the trustor leaves the experiment with no payment. Our study contrasts that situation to a treatment in which trust and trustworthiness might help to escape an inevitable financial loss. Both the trustor and trustee might break even or even leave the experiment with a positive outcome. We find slightly more trust in our treatment than in the established design; however, we find no difference in trustworthiness.