Choosing a Partner for Social Exchange: Charitable Giving as a Signal of Trustworthiness

Sebastian Fehrler and Wojtek Przepiorka

No 9998, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: People benefit from being perceived as trustworthy. Examples include sellers trying to attract buyers, or candidates in elections trying to attract voters. In a laboratory experiment using exchange games, in which the trustor can choose the trustee, we study whether trustees can signal their trustworthiness by giving to charity. Our results show that donors are indeed perceived as more trustworthy and they are selected significantly more often as interaction partners. As a consequence of this sorting pattern, relative payoffs to donors and non-donors differ substantially with and without partner choice. However, we do not find donors to be significantly more trustworthy than non-donors. Our findings suggest that publicly observable generosity, such as investments in corporate social responsibility or donations to charity during a political campaign, can induce perceptions of trustworthiness and trust.

Keywords: costly signaling; social preferences; trust; trustworthiness; partner choice; corporate social responsibility; electoral competition (search for similar items in EconPapers)
JEL-codes: C92 H41 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2016-06
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-soc
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Forthcoming - published in: Journal of Economic Behavior and Organization, 2016, 129, 157-171

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Journal Article: Choosing a partner for social exchange: Charitable giving as a signal of trustworthiness (2016)
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