Ok, so the title of the post gives the paper more pizzazz than it really has, but hey? Today, a little discussion about Nava Ashraf, Iris Bohnet and Nikita Piankov's (2006) paper 'Decomposing Trust and Trustworthiness'.

The main reason that it is of interest to me is that it used a sample of students from South Africa in Cape Town (which somehow was spelt Capetown in the paper, ATROCIOUS editing!), along with students from Boston, US and Moscow, Russia.

The next point of interest is that, unlike many economic experiments, it assesses within-subject variation across two different games, the dictator game and the trust or 'investment' game.

The authors had 4 main hypotheses that they wished to test:

1. Trust is only based on expectations of trustworthiness.
2. Trust is only based on unconditional kindness.
   
3. Trustworthiness is only based on reciprocity.
4. Trustworthiness is only based on unconditional kindness.
   

Our results suggest that many people may play a different game than researchers thought they were playing when confronted with the “investment game.” Only 36 percent of the 159 trustors who decided to send any money in our “investment game” expected to make money (204).

Our design allowed us to solve one of the important trust puzzles, namely that people trust even though hardly anyone makes money by doing so. We found that generally, people are aware of this. They trust even though they know it does not pay monetarily. They enjoy the act of trusting and being kind to others, even to anonymous strangers (204).

Experimenter bias is not a well-covered topic in the area of experimental economics, either because those who decide to test it don't find anything worth reporting, or those who do attempt to test it struggle to be published. Who knows?

Nevertheless, a 2004 working paper by Alessandro Innocenti and Maria Grazia Pazienza addresses the question of experimenter bias with respect to the gender of the experimenter. They used the trust game with various treatments to check whether the gender of the experimenter changed any of the responses by the subjects. The trust game involves a pairing of two individuals (a sender and a receiver), the sender chooses to 'invest' an amount in the other person (trust element), this amount is then tripled in value and the receiver may then choose to send some money back to the sender (reciprocity element).

There results were as follows:

1. There was no evidence that the gender of the experimenter affected the degree of trust.
   
2. The presence of a female experimenter was correlated with a statistically significant higher degree of reciprocity.
   
3. The effect (of female experimenter reciprocity inflation) occurred across the genders of the subjects, i.e. it was not a 'correspondence' effect of woman-to-woman as some might argue.
   

As the token economist amongst friends and family, I thought I would recommend the following links on the current financial crisis.

First, Wikipedia has a fantastic timeline of the current crisis, under the title 'Subprime Crisis Impact Timeline'.

Second, you can peruse these useful notes by Roger Congleton of GMU (they follow the GMU line somewhat, so take the ideology of them with a pinch of salt, but read them anyway).

Third, there is a new blog documenting the financial crisis: The Money Meltdown.

Fourth, there are several blogs that I read with commentary on the crisis that I would recommend: Marginal Revolution, The Semi-daily Journal of Brad DeLong, Greg Mankiw, Paul Krugman and Mark Thoma's Economist's View. Mankiw regularly gives interesting and brief insights, as well as giving links to good articles by prominent individuals. Thoma cites articles at length and gives his own commentary.

Fifth, don't believe what everyone has to tell you about Adam Smith and the financial crisis. Read what Gavin Kennedy has to say here, here and here on his blog 'Adam Smith's Lost Legacy'.

Sixth, Duncan Green, the head of research for Oxfam, maintains a blog and has couple of posts on the topic of the financial crisis and development, the most interesting post of which is a discussion of what $700bn would do for global development.

Lastly, some audio and video stuff. EconTalk host Russ Roberts chats with Arnold Kling on the role of Fannie Mae and Freddie Mac. I found this very useful for helping me to understand what exactly they did and, thus, how they impacted on the financial crisis. Roberts also interviewed Robert Shiller (of the Case-Shiller (housing) index fame) on housing bubbles, which I found interesting. UChannel, another audio and film 'academic' web resource, has a discussion featuring Paul Krugman and Alan Blinder, both of whom have been quite outspoken on the crisis and its possible solutions. Krugman especially is a fan of nationalizing Fannie and Freddie.

Ok, that's enough for now and should sate any financial crisis appetite for the moment.

...to those at Intrade. It looks like Obama has overtaken McCain substantially once more. Ahhh... the effects of Pa(l)in bring me joy.