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Collection Highlights

Social Psychology Third Edition Handbook of Basic

Principles Paul A M Van Lange

The philosophy of trust 1st Edition Paul Faulkner

Digital Dilemmas: Exploring Social Media Ethics In

Organizations Øyvind Kvalnes

Infectious Inequalities Epidemics Trust and Social

Vulnerabilities in Cinema 1st Edition Han
Friedrich Nietzsche and European Nihilism 1st Edition Paul
Van Tongeren

Money Currency and Crisis In Search of Trust 2000 BC to AD

2000 1st Edition R.J. Van Der Spek

Trust Factor The Science of Creating High Performance

Companies 1st Edition Paul J. Zak

Revved The Driven World 1st Edition A.M. Mahler

Ethical Dilemmas in Public Policy The Dynamics of Social

Values in the East West Context of Hong Kong 1st Edition
Betty Yung
i

■ Trust in Social Dilemmas

ii

Series in Human Cooperation

Series Editor
PAUL A. M. VAN LANGE
Reward and Punishment in Social Dilemmas
Edited by Paul A.M. Van Lange, Bettina Rockenbach, and Toshio Yamagishi
Trust in Social Dilemmas
Edited by Paul A.M. Van Lange, Bettina Rockenbach, and Toshio Yamagishi
iii

Trust in Social
Dilemmas
EDITED BY

Paul A. M. Van Lange

Bettina Rockenbach
Toshio Yamagishi

3
iv

3
Oxford University Press is a department of the University of Oxford. It furthers
the University’s objective of excellence in research, scholarship, and education
by publishing worldwide. Oxford is a registered trade mark of Oxford University
Press in the UK and certain other countries.

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© Oxford University Press 2017

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Library of Congress Cataloging-​in-​Publication Data

Names: Lange, Paul A. M. van, editor. | Rockenbach, Bettina, editor. |
Yamagishi, Toshio, 1948– editor.
Title: Trust in social dilemmas / edited by Paul A.M. Van Lange, Bettina
Rockenbach, Toshio Yamagishi.
Description: New York, NY : Oxford University Press, [2017] |
Series: Series in human cooperation | Includes bibliographical references and index.
Identifiers: LCCN 2016054088 | ISBN 9780190630782 (jacketed hardcover : alk. paper)
Subjects: LCSH: Trust—Social aspects. | Cooperativeness. | Social problems.
Classification: LCC BF575.T7 T7935 2017 | DDC 158—dc23
LC record available at https://lccn.loc.gov/2016054088

9 8 7 6 5 4 3 2 1
Printed by Sheridan Books, Inc., United States of America
v

■  C O N T E N T S

Preface vii
Contributors xi

1 Trust: Introduction and Trending Topics 1

PA U L A . M . VA N L A N G E , B E T T I N A R O C K E N B A C H ,
A N D T O S H I O YA M A G I S H I

2 Trust and Social Dilemmas: A Selected Review of Evidence

and Applications 9
KAREN S. COOK AND BOGDAN STATE

P A R T I  n  Biology and Development of Trust

3 The Neurobiology of Trust and Social Decision-​Making:

The Important Role of Emotions 33
JAN B. ENGELMANN AND ERNST FEHR

4 Neuroendrocrine Pathways to In-​Group Bounded

Trust and Cooperation 57
C A R S T E N K . W. D E D R E U A N D M I C H A E L G I F F I N

5 The Foundations of Individuals’ Generalized Social

Trust: A Review 77
PETER THISTED DINESEN AND RENÉ BEKKERS

6 How Trust in Social Dilemmas Evolves with Age 101

MARTIN G. KOCHER

P A R T I I  n  Trust in Dyads, Groups, and Organizations

7 Let Me Help You Help Me: Trust Between Profit and Prosociality 121
JOACHIM I. KRUEGER, ANTHONY M. EVANS,
A N D PAT R I C K R . H E C K

8 The Mysteries of Trust: Trusting Too Little and Too Much

at the Same Time 139
DETLEF FETCHENHAUER, DAVID DUNNING,
AND THOMAS SCHLÖSSER

v
vi

vi ■ Contents

9 Trust and Cooperation: Survey Evidence and Behavioral

Experiments 155
CHRISTIAN THÖNI

10 The Future of Organizational Trust Research:

A Content-​Analytic Synthesis of Scholarly Recommendations
and Review of Recent Developments 173
B A R T A . D E J O N G , D A V I D P. K R O O N , A N D O L I V E R S C H I L K E

P A R T I I I  n  Trust in Different Cultures

11 Individualism-​Collectivism, the Rule of Law, and

General Trust 197
T O S H I O YA M A G I S H I

12 The Influence of Globalization and Ethnic Fractionalization

on Cooperation and Trust in Kenya 215
NANCY R. BUCHAN AND ROBERT ROLFE

13 Improving Outcomes in the Trust Game: The Games People

Choose in Oman, the United States, and Vietnam 237
I R I S B O H N E T, B E N E D I K T H E R R M A N N , M A L I H E H PA R YAV I ,
ANH TRAN, AND RICHARD ZECKHAUSER

14 Trust in African Villages: Experimental Evidence

from Rural Sierra Leone 263
PA U L H O F M A N , E R W I N B U LT E , A N D M A A R T E N V O O R S

Index 279
vi

■  P R E F A C E

Social dilemmas pose a key challenge to human society. Conflicts between self-​
interest and collective interests are inherently complex. Global warming and
depletion of natural resources, such as rainforest, fish, or threatened species all
share important social dilemma features. Likewise, how can we make most or
all people feel committed to contribute to important public goods, such as going
beyond the call of duty at the workplace to realize important goals or simply pay-
ing tickets when enjoying public transportation. Besides their obvious societal rel-
evance, social dilemmas constitute an important scientific topic as it relates to the
study of human cooperation. Social dilemmas bring to the forefront motives such
as selfishness, egalitarianism, and retaliation or emotions such as empathy, guilt,
or shame. It is a “rich” situation that has, predictably, drawn the scientific curiosity
of many scientists working in various disciplines, such as anthropology, biology,
economics, management science, political science, psychology, and sociology.
One of the most basic “states” that is relevant to social dilemmas is trust. We
do not know of any scientist who would not agree about the importance of trust
for understanding cooperation in social dilemmas. Some might even go so far
as to say that cooperation without trust is hardly possible at all, in that trust is
a considered a necessary, albeit not sufficient, ingredient in cooperation. Others
would note that cooperation is still possible without trust but nevertheless agree
that trust is one of the most important keys to promoting and maintaining coop-
eration. And empirically, the correlation between expectations regarding coopera-
tive behavior by others and own cooperation has been observed in many types of
social dilemmas and is relative to other variables, large in magnitude. In short,
trust matters in social dilemmas.
The concept of trust has received immense attention from various scientists. It
has been proven useful in understanding the functioning of societies, organiza-
tions, groups, and relationships. For example, numerous studies in sociology and
political science have been conducted under the label of “social capital” to under-
stand how and why trust and social connection are important to well-​functioning
societies. Likewise, in the smaller contexts, such as organizations and teams, the
concept of trust has been shown to play a key role in predicting outcomes such as
motivation and performance, citizenship behaviors, and absenteeism. And in the
context of close relationships, trust is one of the key predictors of happiness and
relationship stability.
The broad attention of trust has yielded a wealth of findings that have con-
tributed to theorizing about the functioning of collectives, whether they be rela-
tionships, organizations, or societies at large. Needless to say, while past research
has answered many questions, it has also energized new questions. One emerg-
ing topic is connected to understanding the biology and human development of
trust. For example, what are the neuroscientific underpinnings of trust? Do people

vii
vi

viii ■ Preface

become more (or less) trusting over a lifetime, and if so, why? There are indeed
many mysteries regarding trust even at the level of the individual. These issues are
captured in Part I, titled “Biology and Development of Trust.” There are also new
developments in how trust unfolds in the context of dyads, groups, and organiza-
tions. The focus here is on social interaction and on the functions that trust may
serve in organized settings. These issues are captured in Part II, titled “Trust in
Dyads, Groups, and Organizations.” Finally, one especially novel area of research
operates at the level of culture. Recent empirical approaches examine economic
games to explore cultural similarities and differences among societies. Also, there
is now more attention on societies that are clearly understudied and that may
inform us about the various roots of trust and distrust in differing societies, as well
as how cooperation can be maintained and promoted in differing societies. These
issues are captured in Part III, titled “Trust in Different Cultures.”
Accordingly, we have used three broad themes as an organizing framework
for the chapters on trust: the biological and developmental approaches to trust;
trust in dyads, groups, and organizations; and trust in different cultures. This book
benefits from contributions of scientists that are all highly distinguished, active
researchers on the topic of trust in social dilemmas and related economic games.
Because the contributors differ in their scientific backgrounds, be it anthropology,
economics, neuroscience, political science, or psychology, the chapters comple-
ment each other in various ways. Indeed, this book series was inspired by two
general ideas. First, we wanted a topic, within the social dilemma literature, that
is key to understanding human cooperation and that has generated considerable
research. Second, we believe that for many broad topics in social dilemmas, it takes
the expertise from scientists working in different fields and disciplines to make
scientific progress in understanding how exactly cooperation can be promoted.
For such reasons, we invited researchers working from different perspectives and
backgrounds but who in the final analysis all seek to answer the question about
how trust can promote cooperation to contribute to this book project. And we
were fortunate that nearly all of the scientists we invited were happy to contribute.
This is the second volume in the series on human cooperation. As in the first
volume, which focused on reward and punishment in social dilemmas, we hope
to reach a broad audience of scientists in various fields and disciplines, as well as
the interested reader or practitioner who is committed to managing and resolv-
ing social dilemmas in various domains of social life. We should add that this
book is primarily aimed at the scientific community of researchers interested in
the question of human cooperation. After all, the book provides an up-​to-​date
overview of many of the key issues in trust in social dilemmas. As such, the book
should be especially informative to students and faculty working in these areas.
At the same time, our view, perhaps slightly biased, is also that the book should
also be relevant to scientists and practitioners in areas such as conflict resolution,
management, morality, fairness, negotiation, and public policy. Trust in social
dilemmas is at heart of these issues, as one could also infer from the programs of
research that are covered in this book. As such, we hope the book will be helpful
ix

Preface ■ ix

to a relatively broader field of students, faculty, and professionals working in areas

that are importantly linked to social dilemmas.
We would like to extend our gratitude to a number of people for making
valuable contributions to this book project. To begin with, we wish to thank the
community of all social dilemma researchers who collectively have contributed
to this interesting, and important, theme. Moreover, this book grew out of the
biannual international conferences on social dilemmas. The first conference
was held in Groningen, the Netherlands, in 1984, and the most recent confer-
ence was held in Hong Kong in 2015. In between there were conferences in
the United States, the Netherlands, Japan, Australia, Germany, Israel, Poland,
Sweden, and Switzerland, a period during which the community of social
dilemma researchers that attend these conferences grew from around 15 in
1984 to about 150 scientists in more recent years. These scientists work in vari-
ous disciplines, adopt diverse theoretical perspectives, address complementary
topics in social dilemmas, and work in different parts of the world. It was not
only the topic as such but also the increasing popularity and breadth of social
dilemma research that our publisher seems to appreciate. Indeed, we want to
thank Abby Gross, who has expressed her genuine enthusiasm and commit-
ment from the very beginning at a meeting of the Society and Personality and
Social Psychology and throughout the six years after that meeting while we
edited this book (and our previous book). The help and support of Courtney
McCarroll is also strongly appreciated.
Finally, we hope that you will enjoy reading this book—​as a student, fellow aca-
demic, teacher, and perhaps practitioner, or member of the general public—​and
that it makes a meaningful difference, even if only a small difference, in how you
think about your next step in research on human cooperation, in your theoretical
work on social dilemmas, or in the ways in which you effectively promote coop-
eration in your everyday lives and society at large.
The Editors, January 2016
x
xi

■  C O N T R I B U T O R S

René Bekkers Peter Thisted Dinesen

Faculty of Social Sciences Department of Political Science
VU University University of Copenhagen
Amsterdam, the Netherlands Copenhagen, Denmark
Iris Bohnet David Dunning
John F. Kennedy School of Department of Psychology
Government Cornell University
Harvard University Ithaca, NY
Cambridge, MA
Jan Engelmann
Nancy Buchan Centre for Cognitive Neuroimaging
Darla Moore School of Business Radboud University
University of South Carolina Nijmegen, the Netherlands
Columbia, SC
Anthony M. Evans
Erwin Bulte Department of Social Psychology
Development Economics Group Tilburg University
Wageningen University Tilburg, the Netherlands
Wageningen, the Netherlands;
Ernst Fehr
Department of Economics
Department of Economics
Utrecht University
University of Zurich
Utrecht, the Netherlands
Zurich, Switzerland
Karen S. Cook
Detlef Fetchenhauer
Department of Sociology
Department of Economic and Social
Stanford University
Psychology
Stanford, CA
University of Cologne
Carsten K. W. De Dreu Köln, Germany
Department of Psychology
Michael Giffin
Center for Experimental Economics
Department of Psychology
and Political Decision Making
University of Amsterdam
University of Amsterdam
Amsterdam, the Netherlands
Amsterdam, the Netherlands
Patrick R. Heck
Bart de Jong
Department of Cognitive, Linguistic,
Centre for Sustainable HRM and
and Psychological Sciences
Well-​being
Brown University
Australian Catholic University
Providence, RI
Melbourne, Australia

xi
xi

xii ■ Contributors

Benedikt Herrmann Thomas Schlösser

School of Economics Department of Economic and Social
University of Nottingham Psychology
Nottingham, United Kingdom University of Cologne
Köln, Germany
Paul Hofman
Development Economics Group Bogdan State
Wageningen University Department of Sociology
Wageningen, the Netherlands Stanford University
Stanford, CA
Martin Kocher
Department of Economics Christian Thöni
University of Munich Département D’économétrie et
Munich, Germany D’ économie Politique
University of Lausanne
David P. Kroon
Lausanne, Switzerland
Department of Management and
Organization Anh Tran
VU University School of Public and Environmental
Amsterdam, the Netherlands Affairs
Indiana University Bloomington
Joachim I. Krueger
Bloomington, IN
Department of Cognitive, Linguistic,
and Psychological Sciences Paul A. M. Van Lange
Brown University Department of Psychology
Providence, RI VU University
Amsterdam, the Netherlands
Maliheh Paryavi
John F. Kennedy School of Maarten Voors
Government Development Economics Group
Harvard University Wageningen University
Cambridge, MA Wageningen, the Netherlands;
Department of Land Economy
Bettina Rockenbach
University of Cambridge
Faculty of Management, Economics
Cambridge, England, UK
and Social Sciences
University of Cologne Toshio Yamagishi
Köln, Germany Department of Behavioral Science
Graduate School of Letters
Robert Rolfe
Hokkaido University
Darla Moore School of Business
Hokkaido Prefecture, Japan
University of South Carolina
Columbia, SC Richard Zeckhauser
John F. Kennedy School of
Oliver Schilke
Government
Department of Management and
Harvard University
Organizations
Cambridge, MA
University of Arizona
Tucson, AZ
1

1 Trust
Introduction and Trending Topics

■  AUL A. M. VAN LANGE,

P
BETTINA ROCKENBACH,
AND TOSHIO YAMAGISHI

One might debate about when exactly research on social dilemmas truly began
to flourish, whether it was around 1960 or even earlier. But there is clear con-
sensus that it was much later that the concept of social dilemmas was introduced.
Indeed, as far as we know, the integrative concept of social dilemmas was first
described and defined by Robyn Dawes (1980). There is now, several decades later,
little doubt that social dilemmas as a concept will be used as theoretical construct
in summarizing research on how people deal with conflicts between self-​interest
and collective interests. But the seminal paper by Dawes did much more. It also
advanced a broad hypothesis about human cooperation, as the following quote
illustrates:
Thus, three important ingredients for enhancing cooperation in social dilemma situa-
tions may be: knowledge, morality, and trust. These ancient virtues were not discovered
by the author or by the United States Government, which invested millions of dollars in
research grants over the years to have subjects play experimental games. But the above
analysis indicates that they may be the particular virtues relevant to the noncoercive
(and hence efficient) resolution of the social dilemmas we face. (Dawes, 1980, p. 191)

It is not completely clear how to assess the importance of knowledge and morality.
Indeed, the ingredients of knowledge and morality are in need of more research
to evaluate their central importance to social dilemmas. But especially since 1980,
the central importance of trust in social dilemmas has been demonstrated in vari-
ous disciplines. In fact, most would agree that it is quite a challenge to maintain
or promote cooperation in the absence of trust. And most would agree even more
that trust is especially important when thinking of “noncoercive resolutions of the
social dilemmas we face.”
This is already sufficient reason to devote a special volume of social dilemmas
to the topic of trust. Besides the fact that trust has been shown important to under-
standing cooperation in social dilemmas, there are more reasons. One is empiri-
cal: trust has been one of the most widely studied concepts across the various
disciplines—​in anthropology, biology, economics, neuroscience, political science,
psychology, and sociology. Another is general and perhaps even more important.
Trust has been shown to be essential in social dilemmas, as well as in various
situations that go beyond social dilemmas. Trust has been shown to be crucial to

1
2

2 ■ Trust in Social Dilemmas

understanding personality differences (dispositional trust), social relations (rela-

tional trust), organizations (organizational trust), institutions or politics (insti-
tutional trust), as well as trust in specific others (particularized trust) or others
in general (general or generalized trust). Also, trust is key to understanding how
people process social information, such as judgments of others’ faces, emotions,
and behavior. And many have noted before us that it takes trust, although often
unconscious, to eat out at a restaurant, to initiate a business relation with another
party, or in the present era: for example, whether to respond to an email from a
stranger.

■ T R U S T I N S O C I A L D I L E M M A S A N D B E Y O N D

Trust is often defined in terms of the intention to accept vulnerability based upon
the positive expectations or beliefs regarding the intentions or behavior of another
person or other people in general (Rotter, 1967; Rousseau, Sitkin, Burt, & Camerer,
1998). Yet other definitions of trust emphasize expectations, predictability, and
confidence in others’ behavior (e.g., Dasgupta, 1988; McAllister, 1995; Sitkin &
Roth, 1993). And there are definitions that emphasize that trust involves expecta-
tions of other’s benevolent motives in situations that involve a conflict of interests
(e.g., Mayer, Davis, & Schoorman, 1995; Yamagishi, 2011). This book captures a
mixture of these definitions, especially that the defining feature of trust originates
in the expectation or beliefs of benevolent motives of a particular other or oth-
ers in general (Balliet & Van Lange, 2013 a). Behaviorally, trust becomes mani-
fest in accepting vulnerability, which is based on these such “benevolent beliefs.”
Although there may be different bases of trust, such as competence-​based trust or
integrity-​based trust, our treatment of trust will often be focused on benevolence-​
based trust. This approach is most suitable to how the issue of trust is examined
in the context of various social dilemmas or situations closely related to social
dilemmas—​such as the trust game, the ultimatum game, and the like.
We have already noted that trust is relevant to both social dilemmas as well as
many situations other than social dilemmas. This underlines the general impor-
tance of trust across many social situations. But perhaps even more importantly,
in most social interaction situations, where the past and especially the future mat-
ters, trust may well be one of the most vital constructs that gives direction to one’s
behavior. Trust is often described as “social glue” to relationships, groups, and
societies, in that it connects people, and facilitates thoughts, motives, and behav-
iors that promote collective goals (Van Lange, 2015). It is no overstatement that
with trust, relationships fare better, organizations perform better, and societies
function better (e.g., Holmes & Rempel, 1989; Fehr & Rockenbach, 2003; Kramer,
1999; Simpson, 2007; Putnam, 1993; Yamagishi, 2011). One might speculate that
these benefits of trust are ultimately linked to the specific social dilemmas that
people face in relationships, organizations, and societies at large.
It is also important to note that trust serves important functions for not
only collectives, such as relationships, organizations, and societies, but also for
individuals themselves. For example, individuals with high (versus low) trust
in other people are more likely to sustain volunteering activities, have greater
3

Trust: Introduction and Trending Topics ■ 3

perspective-​taking skills, report greater life satisfaction, exhibit greater physical

health, and even live longer (e.g., Balliet & Van Lange, 2013a; Barefoot, Beckham,
Brummet, & Maynard, 1998; Bekkers, 2012, Carter & Weber, 2010). Some theo-
ries, such as attachment theory, have emphasized the importance of trust, in the
form of secure attachment, for human development. For example, there is a close
association between early secure attachment and later quality of social relations,
cognitive ability, and emotional stability (e.g., Mikulincer, 1998; Simpson, 2007).
As such, the importance of trust for collectives and individuals alike seems dif-
ficult to overestimate.

■ T R U S T : F R O M B I O L O G Y T O C U L T U R E

The broad attention of trust has yielded a wealth of findings, which have con-
tributed to theorizing about the functioning of collectives, whether they be rela-
tionships, organizations, or societies at large. However, while past research has
answered many questions, it has also energized new questions. One emerging
topic is connected to understanding the biology and human development of trust.
In particular, recent research has focused on the neuroscience of trust, to under-
stand the processing of information that is relevant to trust (e.g., Adolph, 2002).
Likewise, the function of hormonal responses has captured the interest of many
researchers (De Dreu et al., 2010; Kosfeld, Heinrichs, Zak, Fischbacher, & Fehr,
2005). A complementary topic focuses on the development of trust over the life
course. For example, do people become more (or less) trusting over a life time, and
if so, why? There are indeed many mysteries regarding trust even at the level of the
individual. These issues are captured in Part I, titled “Biology and Development
of Trust.”
A second important innovation in research on trust operates at the interper-
sonal, group, and organizational level. This is the level where trust often is shaped
by face-​to-​face interactions or through social media in small groups. It is a con-
text where individuals respond to one another’s actions and where there often
is a fairly strong (and direct) connection between how people interact in social
settings. And in groups and formal organizations, communication styles, leader-
ship, and justice are important to trust. As alluded to earlier, this is also the level
where trust is strongly linked to social functioning. For example, because there is
often an awareness that people seek to get a grip on one another’s trustworthiness,
people may use heuristics and norms (or norms as heuristics) in dealing with the
complexities of situations. And although trust has received considerable attention
in teams and organizations, many thorny issues exist. For example, the complexi-
ties of trust also operate at the level of relationships between units or teams. These
issues are captured in Part II, titled “Trust in Dyads, Groups, and Organizations.”
A third and final important innovation is the emerging trend toward under-
standing trust at the level of culture. There is already strong evidence that cultural
influences should be quite pervasive. The evidence obtained in the World Values
Survey shows immense differences among countries in their levels of generalized
trust. More recent approaches examine economic games to explore cultural simi-
larities and differences. Also, there is now more attention for societies that are
4

4 ■ Trust in Social Dilemmas

clearly understudied, and that may inform us about the various roots of trust and
distrust in differing societies, as well as how cooperation can be maintained and
promoted in differing societies. These issues are captured in Part III, titled “Trust
in Different Cultures.”

■ O
 VERVIEW OF THE BOOK

The major themes and puzzles discussed here are central to contemporary
research on trust in social dilemmas—​although there are several other puzzles
that can be addressed as well. The themes we highlighted cut across scientific
fields and disciplines, and together they should provide the bigger picture on
the workings and the functions of trust in facing challenges and opportunities of
social life at the level of the individual, the dyad or organization, or the society at
large. Although many chapters can be categorized in a variety of ways, we have
decided to organize the book around three complementary topics: (a) biology
and development of trust (Part I); (b) trust in dyads, groups, and organizations
(Part II); and (c) trust in different cultures (Part III).
Before the thematic sections, this book includes a brief introduction and “trend-
ing topics” (this chapter) as well as a selective review of trust and social dilemmas
by Karen S. Cook and Bogdan State (Chapter 2). In combination, these chapters
serve as broad introductions to trust in social dilemmas (and beyond). We should
also note that there are already several brief or comprehensive reviews of trust
(e.g., Cook, Hardin, & Levi, 2005; Simpson, 2007; Van Lange, 2015; Yamagishi,
2011), social dilemmas (e.g., Parks et al., 2013; Van Lange, Joireman, Parks, & Van
Dijk, 2013), as well as trust in social dilemmas (e.g., Balliet & Van Lange, 2013;
Ostrom, 1998; Weber, Kopelman, & Messick, 2004). If desired, we believe that
the readers could consult these sources to familiarize themselves with trust, social
dilemmas, or both in combination.
The first section of this book, titled “Biology and Development of Trust,”
addresses the key questions about the biology and development of trust. In
Chapter 3, economists Jan B. Engelmann and Ernst Fehr discuss the neurobiol-
ogy of trust and cooperation. In doing so, they draw attention to the neurosci-
ence of approach and aversive emotions in understanding trust and cooperation.
In Chapter 4, psychologists Carsten K. W. de Dreu and Michael Giffin focus on
the neuroendocrine pathways to trust in groups, with a particular emphasis on the
challenges and threats of intergroup conflict. While Chapters 3 and 4 focus on the
biology of trust, Chapters 5 and 6 focus on the development of trust. In Chapter 5,
Peter Thisted Dinesen and René Bekkers provide a state of the art regarding the
key determinants relevant to the development of trust. In Chapter 6, economist
Martin G. Kocher discusses empirical research addressing the important yet under-
addressed issue of how trust may develop over a lifetime.
In Part II we focus on trust as a key variable to social decision-​making and
interaction. The section is labeled “Trust in Dyads, Groups, and Organizations.” In
Chapter 7, Joachim I. Krueger, Anthony M. Evans, and Patrick R. Heck discuss the
instrumental, or perhaps pragmatic value, of trust. The inviting title “Let Me Help
You Help Me” should trigger the curiosity of anyone who (realistically) believes or
5

Trust: Introduction and Trending Topics ■ 5

seeks to challenge that assumed similarity and assumed reciprocity underlie trust
and human cooperation. One step further, in Chapter 8, Detlef Fetchenhauer,
David Dunning, and Thomas Schlösser discuss the mystery of trust: Can trust-
ing too little and trusting too much go together? In Chapter 9 Christian Thöni
focuses on normative influences on cooperation, but especially on antisocial pun-
ishment, in an attempt to understand why people might seek to punish those who
contribute to collective welfare or public good dilemmas. Last, Bart A. de Jong,
David P. Kroon, and Oliver Schilke provide a systematic, content-​analytic review
of research on trust in organizations, outlining various avenues for future devel-
opments of various issues, including how trust can be maintained or promoted in
organizations.
The final section, titled “Trust in Different Cultures,” is perhaps the most novel
section. After all, there is not much research in trust in non-​Western societies,
but insights from these societies, small or not, might help us understand many
societal issues that are classic, timely, or both. In Chapter 11, Toshio Yamagishi
discusses pros and cons of the rule of law as a determinant of trust in various soci-
eties. In particular, do people with weak ties in their immediate proximity seek out
opportunities of exchange in the broader world? If so, does general trust matter?
In Chapter 12, Nancy R. Buchan and Robert Rolfe examine the influence of glo-
balization and ethnic fractionalization on cooperation. Sometimes, ethnic roots
and identification may undermine the role of globalization on cooperation. How
can we replace local identities with global ones? The final two chapters focus on
two particular cultures. In Chapter 13, Iris Bohnet, Benedikt Herrmann, Maliheh
Paryavi, Anh Tran, and Richard Zeckhauser examine differences and similarities
among the participants living in Oman, the United States, and Vietnam, uncover-
ing striking similarities in principals’ tendencies to avoid risks and play it safe—​
with the implication that they do not benefit from communicating trust to the
members they represent. In the final chapter, Paul Hofman, Erwin Bulte, and
Maarten Voors examine rural Sierra Leone as a relative unique society in which
exchange in agriculture and farming plays a key role. Their findings uncover that
people are somewhat less trusting than we may witness among strangers in trust
games, but there are similarities in terms of trustworthiness.

■ C
 ONCLUSION

Trust represents a classic theme in research on social dilemmas. Historically, trust

has been one of the key variables in research on prisoner’s dilemma and early
theory theorizing on human cooperation. After an explosion of research on trust
during the past two decades in particular, scientists are now “en route” to examin-
ing basic issues revolving around the biology and development of trust, how and
why trust precisely grows (or not) in social settings, including dyads and orga-
nizations, and how trust is shaped in various societies, including societies that
have received relatively little empirical attention. These are exciting times, because
the topic of trust is classic and fundamental—​there is little doubt that trust is an
effective tool to promote cooperation, even if cooperation without trust is pos-
sible under certain circumstances. The past decade has also increasingly revealed
6

6 ■ Trust in Social Dilemmas

emerging themes, new theoretical developments, intriguing questions, and a chal-

lenging debate revolving around the evolution, as well as strengths and limitations,
of trust in social dilemmas and other situations of interdependence. Of course,
living in the era of migration, the issue of intergroup trust becomes an urgent
issue. Why is it that we tend to approach individuals with a healthy dose of trust
but tend to be suspicious of other groups—​or even individual members of other
groups? Some scientists make the claim that it is ultimately trust—​or rather the
lack of it—​that undermines intergroup relations. One of the next challenges is to
examine the workings of trust and how best to organize a system that exploits the
opportunities of trust within groups and between groups in contemporary society.
We hope this book provides a state of the art of this literature and that the themes
discussed in this book will indeed become prominent ones in future research on
trust in social dilemmas—​whether they operate at the level of interpersonal or
intergroup relations.

■ R
 EFERENCES

Adolph, R. (2002). Trust in the brain. Nature Neuroscience, 5, 192–​193.

Balliet D., & Van Lange, P. A. M. (2013a). Trust, conflict, and cooperation: A meta-​analysis.
Psychological Bulletin, 139, 1090–​1112.
Balliet, D., & Van Lange, P. A. M. (2013b). Trust, punishment, and cooperation across 18
societies: A meta-​analysis. Perspectives on Psychological Science, 8, 363–​379.
Barefoot, J. C., Maynard, K. E., Beckham, J. C., Brummett, B. H., Hooker, K., & Siegler, I. C.
(1998). Trust, health, and longevity. Journal of Behavioral Medicine, 21, 517–​626.
Bekkers, R. (2012). Trust and volunteering: Selection or causation? Evidence from a four-​
year panel study. Political Psychology, 32, 225–​247.
Carter, N. L., & Weber, M. (2010). Not Pollyannas: Higher generalized trust predicts lie
detection ability. Social Psychological and Personality Science, 1, 274–​279.
Cook, K. S., Hardin, R., & Levi, M. (2005). Cooperation without trust? New York: Russell
Sage Foundation.
Dasgupta, P. (1988). Trust as a commodity. In D. Gambetta (Ed.), Trust: Making and break-
ing cooperative relations (pp. 49–​72). New York: Basil Blackwell.
Dawes, R. M. (1980). Social dilemmas. Annual Review of Psychology, 31, 169–​193.
De Dreu, C. K. W., Greer, L. L., Handgraaf, M. J. J., Shalvi, S., Van Kleef, G. A., Baas, M., . . .
Feith, S. W. (2010). The neuropeptide oxytocin regulates parochial altruism in inter-
group conflict among humans. Science, 328, 1408–​1411.
Fehr, E., & Rockenbach, B. (2003). Detrimental effects of sanctions on human altruism.
Nature, 422(6928), 137–​140.
Holmes, J. G., & Rempel, J. K. (1989). Trust in close relationships. In C. Hendrick (Ed.),
Close relationships (pp. 187–​220). Newbury Park, CA: SAGE.
Kosfeld, M., Heinrichs, M., Zak, P. J., Fischbacher, U., & Fehr, E. (2005). Oxytocin increases
trust in humans. Nature, 435, 673–​676.
Kramer, R. M. (1999). Trust and distrust in organizations: Emerging perspectives, enduring
questions. Annual Review of Psychology, 50, 569–​598.
Mayer, R. C., Davis, J. H., & Schoorman, F. D. (1995). An integrative model of organiza-
tional trust. Academy of Management Review, 20, 709–​734.
7

Trust: Introduction and Trending Topics ■ 7

McAllister, D. J. (1995). Affect-​and cognition-​based trust as foundations for interpersonal

cooperation in organizations. Academy of Management Journal, 38, 24–​59.
Mikulincer, M. (1998). Attachment working models and the sense of trust: An exploration
of interaction goals and affect regulation. Journal of Personality and Social Psychology,
74, 1209–​1224.
Ostrom, E. (1998). A behavioral approach to the rational choice theory of collective action.
American Political Science Review, 92, 1–​22.
Rousseau, D. M., Sitkin, S. B., Burt, R. S., & Camerer, C. (1998). Not so different after
all: A cross-​discipline view of trust. Academy of Management Review, 23, 393–​404.
Rotter, J. B. (1967). A new scale for the measurement of interpersonal trust. Journal of
Personality, 35, 651–​665.
Putnam, R. (1993). Making democracy work. Princeton, NJ: Princeton University Press.
Simpson, J. A. (2007). Psychological foundations of trust. Current Directions in Psychological
Science, 16, 264–​268.
Sitkin, S. B., & Roth, N. L. (1993). Explaining the limited effectiveness of legalistic “rem-
edies” for trust/​distrust. Organization Science, 4, 367–​392.
Van Lange, P. A. M. (2015). Generalized trust: Lessons from genetics and culture. Current
Directions in Psychological Science, 24, 71–​76.
Van Lange, P. A. M., Joireman, J., Parks, C. D., & Van Dijk, E. (2013). The psychology of
social dilemmas: A review. Organizational Behavior and Human Decision Processes, 120,
125–​141.
Weber, J. M., Kopelman, S., & Messick, D. M. (2004). A conceptual review of social dilem-
mas: Applying a logic of appropriateness. Personality and Social Psychology Review, 8,
281–​307.
Yamagishi, T. (2011) Trust: The evolutionary game of mind and society. New York: Springer.
8
9

2 Trust and Social Dilemmas

A Selected Review of Evidence and Applications

■ K A R E N S . C O O K A N D B O G D A N S TAT E

■ I N T R O D U C T I O N

From pollution, corruption, and taxation to providing schools, bridges, and gen-
eral public goods, research on social dilemmas gives us important insights into
the challenges that human societies face in solving a class of problems in which
individual and collective goals are by definition in conflict. Social dilemmas are
ubiquitous and often seemingly intractable. They lie at the nexus of interactions
between the micro and macro levels of social analysis, and their solutions are typi-
cally seen as central to social order. Trust is an important mechanism through
which social dilemmas can be resolved; however, the range of such dilemmas that
are solved based solely on trust is limited. Cooperation often occurs in the absence
of trust (see Cook, Hardin, & Levi, 2005). While researchers have focused a lot
of attention on social dilemmas and trust during the past few decades, often in
separate streams of work, the problems groups and larger communities face of
securing the grounds for trust and ensuring cooperation remain far from resolved.

■ U
 N D E R S TA N D I N G S O C I A L D I L E M M A S

Broadly speaking, social dilemmas can be defined as situations in which indi-

vidual interests conflict with the long-​run collective interest of those involved.
This conflict between individual and group-​level interests is at the core of the
definition provided by Van Lange, Balliet et al. (2014, p. 8), who understand social
dilemmas as
situations in which a non-​cooperative course of action is (at times) tempting for each
individual in that it yields superior (often short-​term) outcomes for self, and if all pursue
this non-​cooperative course of action, all are (often in the longer-​term) worse off than
if all had cooperated.

This general definition provides a clear indication of the types of situations cov-
ered by the term social dilemma and the nature of the conflict involved.
Game theory has been used to represent social dilemmas in terms of variations
in the nature of the interdependencies between the choices the parties can make
and the associated payoffs, such as mutual cooperation or mutual noncooperation
(or defection), among other choices. A number of reviews have been written that
characterize the types of situations that can be represented this way, including

9
10

10 ■ Trust in Social Dilemmas

those most frequently examined in the experimental literature. These include the
game of chicken, the assurance game, and social dilemmas such as those involved
in the provision of public goods and the protection of common resource pools (see
Dawes, 1980; Kollock, 1998, among others). For our purposes we also include a
brief discussion of the trust (or investment) game as well, given that it is a form of
an assurance game.
Perhaps the most general game-​theoretical understanding of a social dilemma
is as the N-​person prisoner’s dilemma (PD; Hamburger, 1973; Dawes, 1980), a gen-
eralized version of the canonical two-​party PD game (Luce & Raiffa, 1957). Trust
is typically represented in experimental settings by the trust game (also referred
to as the investment game; Berg, Dickhaut, & McCabe, 1995). In the typical trust
game, one player (the investor) makes a decision to entrust a certain amount of his
or her resources to another player (the recipient) who must then decide whether
or not to return those resources in order for both to obtain a positive outcome. The
trustee can simply walk away with the resources that have been entrusted to him
or her in an act of defection, thus exploiting the trustor; herein lies the dilemma
for each player in the trust game.
A key difference between trust games and the typical PD is that in the PD the
decisions of both players are made simultaneously and the players do not know
what action each will take. Hence their assessment of the intentions of the other
party to cooperate or defect is central to their own decision to cooperate or not,
and they do not know what the other person will do. This is the source of the
uncertainty in the situation, and the risk involved is the risk of being exploited.
However, in the standard trust game the first player who commits to transfer her
resources to the other party is placing her trust in him to return the favor and
to prove himself trustworthy with respect to her. The initial “investment” of one
party in another serves as a “signal” that she views the other party as potentially
trustworthy. This act lowers the uncertainty in the setting but not the risk involved
in making the choice to cooperate, since the other person may not return the favor.
In the typical PD there is no opportunity for such signaling, thus the players
are wholly dependent on the assumptions they make about the possible coopera-
tiveness or trustworthiness of the other party (or the possibility that he will defect
and end up exploiting her). In our selective review of relevant research we include
studies based on both paradigms, but it should be noted that the underlying deci-
sion structures are significantly different in ways that affect the degree to which
trust matters (see also Cook and Cooper, 2003).
In addition to important differences in their dyadic instantiations, the N-​
person generalization of the trust game and the PD offer a more complex picture
of situations that fall under the category of social dilemmas. The key distinction in
the multiplayer case arguably concerns the simultaneity of decision-​making and
the opportunity for signaling. The N-​person PD game was conceptualized as one
in which players make their decisions simultaneously (Dawes, 1980; Hamburger,
1973). Conversely, a generalized trust game typically has some individuals decid-
ing asynchronously whether to cooperate (repay the trust placed in them), as
noted earlier.
1

Trust and Social Dilemmas ■ 11

Even in a stylized form, a generalized trust game poses complicated issues if we

remove the requirement that entrustment/​cooperation decisions be made simulta-
neously (as they are in a PD). We can imagine important ramifications associated,
say, with a player being the first or the last to make the cooperation decision and
with details such as whether the order is changed between rounds. Furthermore,
in real-​world situations, we can expect individuals to have imperfect information
about the behavior of others, a situation that may further permit “free riding.”
There has been some research (e.g., Kollock 1993) in settings in which “noise” has
been added to the standard paradigm in such a way as to make it unclear at times
whether or not the partner has cooperated (or intends to cooperate), a factor that
makes the experimental paradigm more realistic as a reflection of the conditions
under which individuals often have to make decisions.
Note that many social dilemmas require the existence of a group-​level exchange
structure (Ekeh, 1974; Yamagishi & Cook, 1993). That is, players must contrib-
ute to and draw from a group pool of resources, rather than conducting dyadic
exchanges with one another in a type of generalized exchange. Trust has been
shown to play an important role in both group and network generalized exchange
structures, and its effect is tempered in group generalized exchange structures
since free riding is more likely. Yamagishi and Cook present findings indicating
that there is greater cooperation in network generalized exchange structures than
in group generalized exchange in part because there is less diffusion of respon-
sibility for making a contribution in the network structure involving unilateral
reciprocity. Their findings also suggest that trust is more important in some social
dilemmas than in others, which may not simply be a function of group or network
size. The type of social structure in which the dilemma is embedded matters.

■ T H E R O L E O F T R U S T A N D O T H E R K E Y F A C T O R S

Several relatively standard factors are key to understanding the role of trust in
social dilemmas and decisions to cooperate more generally. These factors include
the perceived efficacy of one’s contributions, the asymmetry of the contributions,
the excludability of those who fail to contribute, and the number of contributions
required to provide the public good (or to preserve it when it can be depleted by
overuse). In addition, a major concern of those who do contribute is the extent
to which others will free ride on the efforts of those who do contribute, especially
when excludability of noncontributors is not possible, allowing some to enjoy the
benefit without paying the cost of helping to provide the public good.
Social dilemma situations as we have noted come in varying forms. However,
in each situation it is fair to say perceived efficacy of one’s contribution is central
to the decision of whether to cooperate. In reviews of the research on this topic we
find that this factor is key especially in situations in which a critical mass can pro-
vide the public good and individuals can assess the impact of their contribution on
the eventual provisioning of the public good. In addition, when noncontributors
can be excluded from receiving the benefits once the public good is provided, it is
well known that others are more likely to contribute. In this case, trust in others
12

12 ■ Trust in Social Dilemmas

facilitates contributions, which may be enhanced if individuals are members of the

same in-​group.
If noncontributors cannot be excluded, a large literature suggests that sanc-
tioning can help. In fact, sanctions are often the most prevalent solution to social
dilemmas (see review in Van Lange, Rockenback, & Yamagishi 2014). Sanctions
can increase the cost of failing to contribute (negative sanctions) as well as increase
the reward (positive sanctions) for those who do contribute. But, as Yamagishi
(1986, 1988b) first indicated, the imposition of a sanctioning system also repre-
sents a social dilemma, identified as the second-​order social dilemma. Who will
contribute to the provision of the sanctioning system? Once a sanctioning system
is established, research reveals that individuals are less likely to free ride and that
this solution is especially effective in low trust societies in which people are more
fearful of being taken advantage of.

■ T H E E F F E C T S O F P A R T I C U L A R
AND GENERAL TRUST ON COOPERATION
IN SOCIAL DILEMMAS

A large number of studies have focused on cross-​cultural variations in general

trust. Using items from the World Values Survey (WVS) and the General Social
Survey (GSS), for example, researchers have identified wide differences in the ten-
dency of people to view strangers they might encounter as trustworthy. Typical
survey items include “Do you think most people can be trusted or you can’t be
too cautious in dealing with them?” The validity of the WVS and GSS questions
as unambiguous measures of individuals’ general dispositions to trust strangers
has come into question (Delhey, Newton, & Welzel, 2011; Miller & Mitamura,
2003; van Hoorn, 2014). Miller and Mitamura, for example, in a critique of the
survey question used most frequently, argue that it is best considered a measure
of cautiousness in dealing with strangers, rather than a measure of the extent to
which they are trusted. Despite its flaws, however, it remains the most commonly
used measure of generalized trust collected at a cross-​country level to date. This
factor is important since the success (or failure) of various solutions to securing
cooperation in social dilemma situations depends not only on the nature of the
interpersonal relations involved at the local level but also on the extent to which
they are embedded in a general culture of trust or distrust.
In a meta-​analysis of trust and cooperation Balliet and Van Lange (2013) find
that various types of trust matter in predicting cooperation in social dilemmas.
They distinguish between “state” and “dispositional” trust. Dispositional trust
(Rotter 1980) is the general tendency of individuals to be trusting of others, and
it has typically been measured by various general trust scales. They refer to state
trust as a belief in the other person’s cooperativeness in a specific setting as in a PD
(e.g., will my partner cooperate and not turn state’s evidence?). Other investigators
have called this form of local trust particular (or particularized) trust.
In an effort to identify the specific conditions under which trust (of either type
referred to as state versus dispositional, or as particular versus general) affects
cooperation, Balliet and Van Lange (2013) review several studies focusing on
13

Trust and Social Dilemmas ■ 13

the level of conflict between individual and collective interests. Importantly, they
conclude that the evidence supports the claim that trust matters most when the
conflict between individual and collective interests is highest. When there is a
lesser degree of conflict, it appears that other factors may be just as important in
determining the degree of cooperation that emerges, perhaps because the risk of
defection or noncooperation is lower. Where these risks are high, it would make
sense that trust comes into play, as indicated in the classic PD—​the prototypi-
cal dilemma in which mutual cooperation is much preferred to mutual defection
(resulting in the worst outcome—​e.g., prison for both parties). Trust is generally
more important in higher risk settings in which exploitation is possible.
With respect to level of conflict between individual and collective interests, an
additional important finding revealed in the meta-​analysis of studies of coopera-
tion and trust conducted by Balliet and Van Lange (2013) is that the finding that
trust matters most when the conflict is highest holds primarily for interpersonal
relations and less so for intergroup relations. This finding has significant implica-
tions for the extent to which various solutions to social dilemmas are effective
in these two contexts. Building bases for trust appears to be more helpful when
the conflict between individual and collective interests is relatively high in inter-
personal relations. This may in part be a result of the fact that it is less difficult
to assess the trustworthiness of another person over time than it is to assess the
trustworthiness of a larger group of people—​a matter of scale.

■ I D E N T I T Y , S O C I A L D I L E M M A S ,
AND COLLECTIVE ACTION

Other solutions, less reliant on assessments of trustworthiness, may be more

effective when the conflict is high between individual level interests and what is
good for the collective in the domain of intergroup relations. Research by Tyler,
Boeckmann, Smith, and Huo (1997), for example, implies that trust between
groups is harder to build especially when the groups have had a history of negative
interactions, or active distrust. They suggest that creating an overarching identity
as members of a larger community or entity is one of the more promising tech-
niques for reducing both the intergroup conflict and the conflict between per-
ceived individual level interests and what is in their collective interest. It is not yet
clear how much this work gives us insights into possible solutions to the social
dilemmas most relevant to global environmental issues such as reducing CO2 and
its effects on global warming, for example. Identifying with a larger entity is thus
one important factor in motivating action that is in the collective interest, but it
is not at all clear how to generate commitment to such an overarching identity,
especially when general trust is low.
Identification with another person or group is predicted to affect the extent
to which actors will take the interests of that person or group into account when
deciding whether to cooperate or defect in a PD (the dyadic form) or a social
dilemma involving a larger number of actors whose fates are interdependent (e.g.,
Dawes, van de Kragt, & Orbell, 1988; DeCremer & Stanten, 2003). Identity has
been treated as a group-​level resource that can be called upon to motivate people
14

14 ■ Trust in Social Dilemmas

to contribute to the group or to engage in collective action (often in the form of

social movements large and small) on behalf of the group. It may also serve as
a resource that enables effective recruitment into a social movement (Brewer &
Silver, 2000; Klandermans & de Weerd, 1999; Kollock, 1998; Snow & McAdam,
2000). Lawler and Yoon (1996) found that identification with the group increases
social cohesion and decreases tolerance for inequality in outcomes. This effect is
similar to what has been called inequity aversion in the social dilemmas literature
by Fehr and Gachter (2000), among others. In addition, identity similarity may
increase trust (e.g. Cook, Hardin, & Levi, 2005).
An interesting feature of many of the early social dilemma experiments is that
the individuals involved have typically been structurally equal. There were no
power or status inequalities between those engaged in the experimental games; the
major decision was only whether or not to cooperate (and, in some cases, whether
to “exit” and not play the game altogether; Yamagishi, 1988a). Recent work has
begun to explore the effects of inequality and power differences among the poten-
tial contributors to the public good. There is also some work on the relationship
between power inequality and trust (e.g., Cook, 2005; Reimann, Schilke, & Cook,
2015). Power differences and inequality in contributions often inhibit cooperation
and collective identification.
Identification, however, makes individuals more aware of their interdependen-
cies and the extent to which mutual cooperation will pay off if those who identify
with one another are prone to trust those they identify with in the sense that they
develop a sense of shared fate and “encapsulated interest.” Identity serves to embed
economic transactions in deeper social structures such as those created by family
ties or friendship relations (Granovetter 1985). Evidence suggests that group-​level
identification can serve as a basis for trust and thus mitigate some social dilem-
mas that arise, for example, among the Orthodox Jews in New York engaged in
diamond trading (Coleman, 1988; Richman, 2006). As Simpson and Macy (2004,
p. 1377) point out, Coleman (1990, p. 158) sees identification as the “process
through which ‘one actor has adopted, or taken up, the other’s interest.’ ” When
this occurs, trust is more likely to occur between the individuals involved on the
encapsulated interest account of trust (Cook, Hardin, & Levi, 2005; Hardin, 2002).
It cannot be assumed, however, that shared identity (e.g., based on shared attri-
butes) simply activates group-​level collective orientation. In the next few sections
we explore various domains of activity in which trust is said to matter in resolving
significant social dilemmas before we comment on other factors (beyond trust)
that often provide grounds for cooperation.

■ T R U S T A N D R E A L - W
​ ORLD SOCIAL DILEMMAS

Trust and cooperation are important topics to study because they are essential ele-
ments of a wide range of social interactions from dyads and small groups to com-
munities and large societies. Trust and cooperation can be seen at work not only in
the laboratory, the locus of much of the existing research, but also in many real-​world
settings. Social movements, for example, rise and fall based on their successes or fail-
ures to generate collective action on behalf of a specific goal or mission. As Olson
15

Trust and Social Dilemmas ■ 15

(1965) famously noted, social mobilization itself can be conceptualized as a free rider
problem, a generalized social dilemma. Interpersonal trust between the movement
participants (or at least the belief that others will continue to cooperate for the benefit
of the group) is often the sine qua non of the movement’s success. Indeed, there are
countless studies in the social movement literature showing the importance of social
ties for the success of social movements (e.g., Gould, 1991; see Poletta & Jasper [2001]
for a more in-​depth discussion), not to mention recruitment to the cause.

■ C
 ORRUPTION

Corruption provides another example of a social dilemma in which trust is often

involved. Arguably, a corrupt, patronage-​based state or organization creates eco-
nomic inefficiencies and thus provides a Pareto-​suboptimal, but nonetheless
stable, outcome in which many transactions are “taxed” by various officials who
appropriate a share of the material flows available by means of their government
positions. Taken in isolation, corruption does not create a social dilemma: there
are no necessary conflicts between individual and group incentives in a state that
functions on a system of patronage. However, corruption has been shown to lead
to suboptimal economic outcomes at both the macro (Mauro, 1995) and micro
(Fisman and Svensson, 2007) levels. Corruption thus presents an implicit social
dilemma, in which members of the polity would likely be better off, ceteris pari-
bus, living in a system without corruption than in a corrupt political system (della
Porta & Vannucci, 1999; Kingston, 2008).
The implicit social dilemma inherent in political corruption can be made
explicit when states undertake anticorruption efforts. In such efforts, paying and
taking bribes can be reframed from simply being “the cost of doing business” to
being an anticivic and possibly criminal practice. Anticorruption projects often
create a clear social dilemma. While it may be immediately apparent (to citizens
and officials alike) that a country’s economy and political system would be better
off without corruption, not engaging in corruption on one’s own would appear
foolish and ineffectual (Rothstein, 2011). In such cases solving the problem of
trust in government is coupled with the problem of corruption itself. The govern-
ment can be trusted only to the extent that it is not corrupt, but, due to the social
dilemma inherent in anticorruption efforts, it cannot succeed at eliminating cor-
ruption if it cannot be trusted. Recent work (Persson, Rothstein, & Teorell, 2013;
Rothstein, 2011) has identified an important consequence of the theoretical fram-
ing of corruption: because corruption has been traditionally conceptualized as a
principal-​agent problem, gradualist policy prescriptions have tended to dominate,
often proving themselves ineffective. Instead, Rothstein and collaborators argue
for a “big-​bang” approach to anticorruption that is cognizant of the inherent sta-
bility of the social dilemma situation created by political corruption.

■ T A X C O M P L I A N C E

Low levels of tax compliance constitute another issue that afflicts countries with
high levels of corruption, creating another type of social dilemma. As Rothstein
16

16 ■ Trust in Social Dilemmas

(2000) notes, differences in tax compliance between countries such as Sweden and
Russia are staggering, as are differences in generalized trust between these two
countries (cf. Bjørnskov, 2008). This is arguably not incidental, as trust in others
and in the government have been found to be important determinants of taxpay-
ers’ willingness to comply with taxation demands ( Rothstein, 2000; Rotter, 1980;
Scholz & Lubell, 1998), and, more broadly, of citizens’ willingness to comply with
the demands of the state (Levi, 1997; Levi & Stoker, 2000). Generally speaking,
taxpayers would be willing to pay their taxes, but only under conditions of fairness
and trust: the taxpayer must believe that (a) other taxpayers will themselves pay
their share, (b) the money will not be misused by corrupt or incompetent govern-
ment officials, and (c) the fiscal burden has an equitable distribution. These issues
have become increasingly acute in the wake of the Greek tax crisis, for instance,
which scholars have directly connected to low levels of trust in government
(Kaplanoglou & Rapanos, 2013).
All three of these requirements create social dilemmas of their own. If individu-
als believe that no one pays their taxes, then the natural incentive of fairness would
dictate noncompliance. Paying one’s taxes would essentially translate into letting
others free ride. Perhaps trust in government and the state apparatus presents the
most important social dilemma: taxpayers would like to pay their taxes if the gov-
ernment could be trusted with their money. But the very reasons why government
offices come to be appropriated for personal gain is arguably intimately tied up
with the syndrome that produces low trust in government in the first place. A state
that collects few taxes is by definition weak: it cannot afford to pay its officials
much, and neither can it afford to sanction their transgressions.
The third requirement, of an equitable fiscal burden, produces its own dilemma,
though in a manner that is perhaps less well appreciated. We could conceive of
both tax collector and taxpayer as players in a repeated “tax game” (Pickhardt &
Prinz, 2014) in which there are potentially two strategies for each of the players.
The collector has to decide whether to demand a reasonable or an onerous pay-
ment from the payer. In turn, the payer may choose to honor the tax payment
or attempt to cheat on taxes, with some probability of success. An onerous tax
demand will induce the payer to cheat on taxes in the future (Feld & Frey, 2002;
Kirchler, Hoelzl, & Wahl, 2008). Thus a virtuous Pareto optimum is expected to
exist, where the taxpayer honors reasonable tax obligations set by the collector in
each round. However, assume that, for some reason such as an external shock or an
increase in the payer’s cheating propensity, the taxpayer does not render any pay-
ments for a number of rounds. In that case, the collector may become convinced of
the payer’s ill intentions and begin demanding onerous payments. Because of the
patent unfairness of the payment demands, the taxpayer may become convinced
of the collector’s ill intent: the game is expected to settle into an equilibrium of low
tax collection and onerous tax demands.
Here research based on the slippery slope framework (Kirchler, Hoelzl, &
Wahl, 2008) for tax compliance is extremely promising. In a survey of Italian
taxpayers Kastlunger, Lozza, Kirchler, and Schabmann (2013) found trust to be
positively related to voluntary tax compliance. Only power perceived as legitimate
(as measured by questionnaire items) was found to be positively associated with
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