Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/98394
Authors: 
Karlan, Dean S.
Year of Publication: 
2005
Series/Report no.: 
Center Discussion Paper 909
Abstract: 
Questions remain as to whether results from experimental economics games are generalizable to real decisions in non-laboratory settings. Furthermore, important questions persist about whether social capital can help solve seemingly missing credit markets. I conduct two experiments, a Trust game and a Public Goods game, and a survey to measure social capital. I then examine whether behavior in the games predicts repayment of loans to a Peruvian group lending microfinance program. Since the structure of these loans relies heavily on social capital to enforce repayment, this is a relevant and important test of the games, as well as of other measures of social capital. I find that individuals identified as 'trustworthy' by the Trust game are in fact less likely to default on their loans. I do not find similar support for the Trust game as a measure of trust.
Subjects: 
trust game
experimental economics
microfinance
JEL: 
B4
C9
D8
O1
Document Type: 
Working Paper

Files in This Item:
File
Size
141.93 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.