Similarities and Differences When Building Trust: The Role of Cultures

We run an experiment in which participants are matched to a group of five and repeatedly have to choose with whom within their group they want to play a trust game. Within this group participants observe of each other age, gender, national-ity and number of siblings. We find that difference in success in the experiment can only be explained in terms of regional membership, belonging to northern or southern Europe. Compared to “South”, “North ” show more trust in periods when trust is rewarded with sufficiently high trustworthiness and show slightly less trust-worthiness at the margin apart from the first period. Differences in behavior of “North ” and “South ” per interaction will not explain the magnitude of the success of “North ” over “South”. But it is these differences that influence future partner se-lection as participants repeated interact within the same group. Participants tend to trust those they trusted before and who trusted them, taking into account the magnitudes when choosing who to trust next. We however do not find evidence of regional discrimination per se. It is only the underlying and significant differences in behavior that translate through repeated interaction into overall differences in payoffs that then can explain the substantial differences in success between the two regions