Exam 8: Trust Game and Market Implications

The study by Kosfeld et al. where participants are administered oxytocin prior to taking part in the trust game is designed to:

Work done by Truman Bewley of Yale University suggests that during recessions managers of most enterprises are reluctant to enact a reduction in wages even though, given the extensive unemployment, they could have easily afforded to hire workers at lower wages. The primary resistance to wage reduction comes from upper management and not from employees. Bewley suggests that the main reason for avoiding pay-cuts is that such pay-cuts hurt morale. Which of the following is not an integral component of worker morale?

The difference between the trust game and the triple dictator game is that:

The evidence from the gift exchange game literature suggests that:

In a dictator game ______________ while in the triple dictator game _______________.

In the Berg et al. trust game, denote the amount sent by the Sender in the trust game as "S", the amount sent back by the Receiver in the trust game as "R", the amount sent by the Allocator in the triple dictator game by "X" and the amount sent by the Allocator in the dictator game as "Y". If transfers made by the first movers in the trust game are motivated by increasing total welfare rather than trust, then we would expect:

The study by Snijders and Keren suggests that the decision to send money or not as the first mover in a trust game is analogous to decision making under risk. Discuss at least one study that shows that the decision to send money in the trust game involves calculations above and beyond any considerations of risk.

Two key components of the loan system implemented by the Grameen Bank of Bangladesh are:

With regards to the trust game, the fact that often trust does not pay may be attributed to the fact that:

Which of the following is not a suitable way to distinguish between altruistic motives and trusting motives on the part of the first movers in the trust game?

Consider the following two two-player games - Game 1 and Game 2. In each game, 1 and 2 refer to the two players. The first number in each payoff box refers to the payoff for player 1 and the second number to the payoff for player 2. The strategies L, R, and D stand for Left, Right and Down respectively. At each node I have shown the player who gets to move at that node. Game 1: Game 2: (a) What is the subgame perfect equilibrium in Game 1 and Game 2? (It is the same in both games. So you only need to solve for it once.) (b) In which game - 1 or 2 - is the symmetric joint payoff maximizing outcome of (100, 100) more likely? Is it Game 1 or Game 2? Why? Explain briefly.

Denote the amount sent by the Sender in the trust game as "S", the amount sent back by the Receiver in the trust game as "R", the amount sent by the Allocator in the triple dictator game by "X" and the amount sent by the Allocator in the dictator game as "Y". How do Ashraf, Bohnet and Piankov use the dictator game, the triple dictator game and the trust game to distinguish between (a) trust and altruism and (b) reciprocity and altruism?

"Extrinsic" motivation:

According to research undertaken by Truman Bewley of Yale University businesses are reluctant to cut wages during recessions even if they can do easily due to large scale unemployment. This reluctance to cut wages comes from upper management rather than the workers. Which of the following is not a reason for management's reluctant to cut wages?

In the Berg et al. trust game, denote the amount sent by the Sender in the trust game as "S", the amount sent back by the Receiver in the trust game as "R", the amount sent by the Allocator in the triple dictator game by "X" and the amount sent by the Allocator in the dictator game as "Y". If the proportional amounts returned by the second movers in the trust game are motivated by altruism rather than reciprocity, then we would expect:

In the trust game, where amounts send by Senders is tripled before reaching Receivers, in order for a trusting action to increase payoff over and above the initial endowment for the trustors:

In trust games where amounts sent by Senders is tripled by the experimenter "trust does not pay" in the sense that on average returns to trustors is typically less than their initial endowments." One possibility for why this happens is that:

The results reported by Eckel and Wilson based on their findings using the Zuckerman Sensation Seeking Scale suggest that