Russel Sage Foundation

Cooperation often benefits all parties involved in an agreement or relationship, but such behavior is often difficult to bring about because of a lack of trust. Some theorists have suggested that obstacles to trusting can be thwarted with effective use of communication and contracts. With support from the Russell Sage Foundation, Avner Ben-Ner of the University of Minnesota and Louis Putterman of Brown University will test the effectiveness of these proposed remedies with laboratory experiments.

First, the researchers will explore the way that communication, both before and after a game of trust, influences behavior. Previous work has revealed that pre-game interaction between the players - even in small and occasionally impersonal doses - "humanizes" one's partner, thereby increasing trust and trustworthiness. Here, Ben-Ner and Putterman will look into how using different words or different media when communicating affect people’s willingness to trust others. In addition, their research will address post-game communication and test whether the knowledge that, later on, one will have to communicate with the other participants will affect a player's behavior during the game. Will fear of social rebuke inspire individuals to cooperate and trust one another?

Ben-Nur and Putterman will also explore the longstanding question of whether contracts support trust by instilling penalties for non-cooperation or dilute it by encouraging parties to be only as cooperative as is necessary to avoid those penalties. Subjects in the experiment will be allowed to negotiate a strategy for the game and, if they desire, to pay a contracting fee and draw up penalties for failure to adhere to the group's best interests. This way, the researchers will be able to see if contracts encourage more cooperation or if subjects are able to create and establish trust as a way to mutually benefit from the game without being hit with contracting costs.