Is Trust a Bad Investment?*
Nava Ashraf, Iris Bohnet and Nikita Piankov†
This paper examines whether trust is an investment decision under uncertainty, based on the
expectation of trustworthiness, and whether trustworthiness is reciprocity, conditional on one’s
counterpart’s behavior. In trust experiments in Russia, South Africa and the United States, two
thirds of the subjects who trust do not expect trust to pay monetarily. We find substantial
heterogeneity in motivation: Expectations of return account for most of women’s trust, and
reciprocity for most of Americans’ trustworthiness. Men’s trust and Russians’ and South Africans’
trustworthiness are significantly related to unconditional kindness as measured by subjects’
behavior in dictator games, us ing a within-subject design.
Key Words: Trust, kindness, reciprocity, gender, cross-cultural experiments. (JEL C72, C91)
*Financial support from the Russell Sage Foundation, the Center for Public Leadership and the Women and Public
Policy Program at the Kennedy School of Government is gratefully acknowledged.
†Ashraf: Department of Economics, Harvard University; Bohnet: Kennedy School of Government, Harvard
University; Piankov: Analysis Group, Boston. Corresponding author: Iris Bohnet, 79 JFK Street, Cambridge,
MA02139, phone: (617) 495-5605, fax: (617) 496-5747, email: Iris_Bohnet@Harvard.edu.
Recently, one of the authors found herself standing in line in a supermarket, with a basket
full of groceries but no wallet. She decided to ask the person behind her whether he could lend her
$20. He did and gave her his business card so that she could return the money. No questions asked.
In such a situation, one party, the trustor, makes himself vulnerable, i.e. takes a course of
action creating incentives for the other party, the trustee, to exploit him. Such behavior is
commonly referred to as trust and it is assumed that the trustor would no