Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/98439
Authors: 
Kataria, Mitesh
Winter, Fabian
Year of Publication: 
2013
Series/Report no.: 
Jena Economic Research Papers 2013-044
Abstract: 
We study the existence of homophily (i.e. the tendency for people to make friends with people who are similar to themselves) with respect to trustworthiness. We ask whether two friends show similarly trustworthy behavior towards strangers, and whether this is anticipated by outsiders. We develop a simple model of bayesian learning in trust games and test the derived hypotheses in a controlled laboratory environment. In the experiment, two trustees sequentially play a trust game with the same trustor, where the trustees depending on treatmen are either friends or strangers to each other. We affirm the existence of homophily with respect to trustworthiness. Trustors´ beliefs about the trustees´ trustfulness are not affected by the knowledge about the (non-)existent friendship between the trustees. Behaviorally, however, they indirectly reciprocate the (un-)trustworthy behavior of one trustee towards his/her friends in later interactions.
Subjects: 
friendship
homophily
indirect tit-for-tat
social networks
trust
JEL: 
C92
D83
J24
J40
Document Type: 
Working Paper

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