Breaking the Norm: An Empirical Investigation into the Unraveling of Good Behavior

30 Pages Posted: 4 Jun 2011 Last revised: 4 Jan 2012

See all articles by Ruth Vargas Hill

Ruth Vargas Hill

World Bank

Eduardo Maruyama

University of California, Los Angeles (UCLA) - Department of Economics

Angelino Viceisza

Spelman College; International Food Policy Research Institute (IFPRI)

Date Written: November 26, 2010

Abstract

We present results from an artefactual field experiment conducted in rural Peru that considers whether observing non-reciprocal behavior influences an individual's decision to reciprocate. Specifically, we consider the behavior of second movers in a trust game, assessing whether their decision to reciprocate is influenced by the observed reciprocity of others. In documenting the impact of an external shock to observed reciprocity, this paper shows that small increases in non-reciprocal behavior result in an unraveling of the norm of reciprocity. Survey data is used to explore mechanisms by which this occurred. Results are not consistent with learning effects, suggesting that preferences may be changed by observing others deviating from a norm of reciprocity. These results suggest that investing in encouraging trustworthy behavior can have large benefits in situations where individuals are observing each other's behavior, such as may be the case in a new market institution.

Keywords: trust, norms, artefactual field experiment, Peru.

JEL Classification: C72, C93

Suggested Citation

Hill, Ruth Vargas and Maruyama, Eduardo and Viceisza, Angelino, Breaking the Norm: An Empirical Investigation into the Unraveling of Good Behavior (November 26, 2010). Available at SSRN: https://ssrn.com/abstract=1796228 or http://dx.doi.org/10.2139/ssrn.1796228

Ruth Vargas Hill

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Eduardo Maruyama

University of California, Los Angeles (UCLA) - Department of Economics ( email )

Box 951477
Los Angeles, CA 90095-1477
United States

Angelino Viceisza (Contact Author)

Spelman College ( email )

350 Spelman Lane S.W.
Atlanta, GA 30314-4399
United States

International Food Policy Research Institute (IFPRI) ( email )

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Suite 400
Washington, DC 20006
United States
+1-202-862-8196 (Phone)
+1-202-467-4439 (Fax)

HOME PAGE: http://sites.google.com/site/viceisza/

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