Using Experimental Economics to Measure Social Capital And Predict Financial Decisions

Arbeitspapier

Questions remain as to whether results from experimental economics games are generalizable to real decisions in non-laboratory settings. Furthermore, important questions persist about whether social capital can help solve seemingly missing credit markets. I conduct two experiments, a Trust game and a Public Goods game, and a survey to measure social capital. I then examine whether behavior in the games predicts repayment of loans to a Peruvian group lending microfinance program. Since the structure of these loans relies heavily on social capital to enforce repayment, this is a relevant and important test of the games, as well as of other measures of social capital. I find that individuals identified as 'trustworthy' by the Trust game are in fact less likely to default on their loans. I do not find similar support for the Trust game as a measure of trust.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Center Discussion Paper ; No. 909

Classification and Topics

• Classification: Wirtschaft
• Subject: trust game ; experimental economics ; microfinance ; Test ; Spieltheorie ; Vertrauen ; Öffentliche Güter ; Social Capital ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Karlan, Dean S.
• Event: Veröffentlichung
• (who): Yale University, Economic Growth Center
• (where): New Haven, CT
• (when): 2005

Further information

• Handle: http://hdl.handle.net/10419/98394
• Last update: 10.03.2025, 11:45 AM CET