Trust and Trustworthiness in Anonymous Virtual Worlds

Abstract

Virtual communities like Second Life (SL) represent an economic factor with increasing potential, but may induce behavior that deviates from real-world experience. This article introduces a new experimental design that is based on the trust game (Berg, Dickhaut, & McCabe, 1995), but eliminates the problem of multiple virtual identities. One treatment of the experiment in the virtual world SL was conducted and the results compared to the First Life (FL) control treatment, which was conducted on a university campus. In SL, significantly lower investment levels were found, but significantly higher average returns were found than in the FL treatment or in the literature. It is conjectured that the disparity between trusting and trustworthy behavior is a sign that the social structure in SL is still evolving. It seems plausible that the trustors in a young and developing society cautiously test the extent of trustworthiness, whereas the trustees strategically invest in levels of trustworthiness that are higher than in settled societies to build up a trustworthy environment.

Notes

Sascha Füllbrunn is a research fellow at the Luxembourg School of Finance, Department of Law, Economics and Finance, University of Luxembourg, Luxembourg. Katharina Richwien is affiliated with the University of Magdeburg, Germany. Abdolkarim Sadrieh is a Professor of Economics and Management in the Department of Economics and Management at the University of Magdeburg, Germany.

¹Obviously, the equilibrium predictions in all studies are analogous to those in Berg, Dickhaut, and McCabe (1995).

²Although the research questions may differ across the studies, the treatments we consider are comparable.

³Not all authors report whether the figures for the percentage returned were calculated including or excluding the endowment of the trustee. This can substantially affect the return on investment.

⁴Johansson-Stenman, Mahmud, and Martinsson (2005) is the only study that we found reporting systematic stake-size differences.

^a Investment = average invested fraction of the endowment.

^b ROI = return on investment: (payback − investment)/investment. Not all authors reported whether the figures for the percentage returned were calculated including or excluding the endowment of the trustee. This can substantially affect the ROI.

⁵Although there are no experiments on the trust game conducted online outside virtual worlds, Charness, Haruvy, and Sonsino (2007) compared behavior of Internet and lab participants in the “lost-wallet game” (Dufwenberg & Gneezy, 2000), which is closely related to the trust game. They found significantly less trust on the Internet, but were “surprised at how little difference” they observed between the treatments (Charness et al., 2007, p. 101).

⁶At the time of the experiment, the exchange rate was U.S. $1 = 268 Linden Dollars.

⁷The participant knew that 1,000 ECU was equivalent to 4€. At the time of the experiment, the exchange rate was U.S. $1 = 0.74€.

⁸The procedure we used was rather complicated to ensure that the treatment is double-blind. Each decision sheet was connected to a unique code that was not visible to the experimenter. After noting the decision on the decision sheet, the participants folded and inserted their decision sheets in ballot boxes. Hence, there was no possibility to connect a participant to his or her decision sheet at the time of the experiment. After the experiment, the payments were made by administrative assistants, who were not involved in the experiment. Thus, the experimenters were not able to associate participants to decisions at the time of payment either.

⁹The result also holds using the Kolmogorov–Smirnov test. We find that the distribution of investments in Second Life significantly differs from that in First Life (p = .003) and that in BDMc (p = .031).

¹⁰We cannot compare the return ratio functions to BDMc because the strategy elicitation method was not used in that experiment.

¹¹Return on investment = (Return – Investment)/Investment.