How to convince someone that you can be trusted? The role of ‘hostages’

Abstract

We consider how credible commitments ('hostages') in the sense of Schelling affect trust and trustworthiness. Using the Trust Game as a metaphor, based on game theoretical modeling and previous results with the Trust Game, we derive several hypotheses on which hostages are more likely to effectively influence the degree to which actors are willing to trust others. Two main characteristics of hostages are highlighted. To ouercome a lack of trust, hostages should credibly promise to compensate when trust is abused or sufficiently reduce the probability that trust will be abused (or both). Our experimental data show that compensating the trustor is more important than reducing the probability of abuse by the trustee. Moreover, counter to our theoretical predictions, the data suggest that hostage posting by itself has positive "signaling value." That is, posting a hostage may induce the other parly to trust for two different reasons. Trust increases not only because the incentive structure changes in a favorable way, but also because of the mere fact that the actor has chosen to post a hostage instead of refraining from it. It also works the other way around. Not posting a hostage when one could have, has negative signaling value. Unfortunately, these signals are deceptive. Those who post a hostage are not more likely to reciprocate trust by trustworthy behavior, and those who do not post a hostage are not more likely to abuse trust.

Temporal Embeddedness and Signals of Trustworthiness: Experimental Tests of a Game Theoretic Model in the United Kingdom, Russia, and Switzerland

“…To our knowledge, the only laboratory experiment with trust games and costly signals as a commitment device was conducted by Bolle and Kaehler (2007) (for other experiments on trust and commitments see, for example, Snijders and Buskens, 2001;Charness and Dufwenberg, 2006;Vieth, 2009). In their experiment, an 'honest' trustee gains from honouring a truster's trust, whereas a 'dishonest' trustee gains from abusing it.…”

Hostage Posting as a Mechanism of Trust

“…Research in this direction seems to be particularly promising because previous experimental evidence on hostages as a mechanism of cooperation in dilemmas such as the trust game and the prisoner's dilemma (Raub and Keren 1993;Snijders 1996: chap. 6;Snijders and Buskens 2001) seems to indicate that -empirically -positive compensation through hostage posting has quite a strong effect on trust and cooperation. It is easily seen that additional predictions for experimental tests of the model can be generated by systematically varying one of the parameters of the model so that HTGUI 'moves' between the sets of conditions for different types of equilibria specified in our theorems.…”

Symbols and investments as signals: Courtship behaviors in adolescent sexual relationships

“…For example, delaying sexual involvement increases the time, money, energy, and resources spent building relationships among courting couples, but going out for dinner at a nice restaurant on a date likely results in some positive benefit. Our approach is distinct from trust games with hostage posting, which limit the costs of hostage posting to one player and focus on the loss of hostages only in the case of abused trust (Raub, 2004; Raub and Weesie, 2000; Snijders and Buskens, 2001). Trust games with hostage posting examine the conditions under which hostages can bind untrustworthy agents to honoring trust, act as forms of compensation, and reflect credible signals; in contrast, we focus exclusively on signaling.…”