Trust , Society , and Information : An Experiment

Trust is an essential ingredient for unlocking economic surplus. However, consider the prisoner’s dilemma—all parties gain from cooperation, yet each party has an incentive to deviate. How can we organize society to unlock the possible gains from trust in such situations? We’ve all had experiences that indicate it is possible. Studies have shown prosocial individuals are more trustworthy. We can take advantage of this fact and suggest pairing prosocial individuals with less prosocial individuals who will trust them if their type is known. In this case, it takes information, timing, and only one pro-social individual to unlock the trust surplus. Finally, we turn to a fundamental question: Will society organize itself so as to unlock surplus? We find that self-organization does just as well as imposed assignment.