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Posted 10.24.06


'Differences' Do Not Influence Trust, Study Finds

COLUMBIA, MO - People often report mistrusting others who are different from them, but a study by researchers at the University of Missouri-Columbia and the College of William and Mary has found that people's actions don't necessarily reflect this mistrust. The findings of the study, which examined participants' economic behavior, are contrary to findings of survey-based studies that have shown diversity hinders trust and cooperation.

Jeff Milyo, Lisa Anderson.."In most surveys, people have reported distrusting those who are different," said Jeffrey Milyo, associate professor in MU's Department of Economics in the College of Arts and Science and in MU's Truman School of Public Affairs. "We wanted to find out if that was just talk, or if it impacted how people act. What we found was that differences did not significantly impact actions. Whatever people might say about trusting or not trusting others, their actions didn't reveal a difference. In our experiment, we found that the general existence of difference between two people did not impact how they acted toward each other."

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Experimental Economics

Milyo and two researchers from the College of William and Mary, Lisa R. Anderson and Jennifer M. Mellor, examined the behavior of participants who were different from each other. To induce difference, the researchers paid each person a different amount of money for participating in the study. In the control group, all participants received the same amount of money (hence, they were "similar"), but in the experimental groups, participants received varying amounts from $4 to $20 (hence, they were "different"). In one scenario, participants were paid privately, while in another, they were paid publicly.

Milyo, Anderson and Mellor asked study participants to play a well-established economics trust game in which each participant was paired with a partner and given $10. The participant could give some, all or none of the $10 to his or her partner, who would receive triple the amount given. For example, if the first person gave $5, the partner would receive $15. After receiving the money, the second person could choose whether to give some, all or none of the money back to the first person.

When two "similar" players played the game, the first player typically gave the second player about half of the money ($4.99 when payment was private, $5.41 when payment was public), exhibiting trust that the other person would give some back. When players who were "different" played the game, the first player also gave about half of the money to his or her partner ($4.04 or $4.19 for private payments and $5.27 or $5.92 for public payments).

"Our study induced a general difference between people - in this case, it was the amount of money paid to study participants - and we found that the difference didn't make people act more or less trusting of each other," said Milyo, who is also the Hanna Family Scholar in the Center for Applied Economics at the University of Kansas and a senior fellow at the Cato Institute in Washington, D.C. "It's difficult to say whether this same principle applies to things like race, religion, or even income, but it does show that the general existence of difference does not make people act mistrustful of each other."

The study's findings also showed that participants acted differently when their monetary awards were received publicly than when they were received privately. When money was given privately, those with the highest awards ($20) gave an average amount of only $3.80 to their partners, but when money was given publicly, they gave an average of $7.14 to their partners.

"Our study showed that whether inequality in payments mattered or not depended on how much information people had about the inequality or where the individuals were in the distribution of payments," Mellor said. "The subjects who were made less trusting by the inequality were those who received the extreme payments - the highest or the lowest. The persons who were paid the average amount were not affected by the inequality. In addition, when participants knew who in the group made the most, the highest paid people acted very differently - by giving more to their partners, as if by guilt. This suggests that differences in the effects of inequality depend on economic factors, but perhaps on psychological factors as well."

The study was published in the September issue of the journal Experimental Economics.



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