Most cooperative interactions involve the expectation of mutual reciprocation and are based on interpersonal trust. Thus, understanding when and how humans acquire interpersonal trust can help unveiling the origins and development of children’s cooperative behavior. Here, we investigated whether prior socio-moral information about trading partners modulates the choice of preschool- (4-5 years) and school-age children (7-8 years) to share their own goods in a child-friendly version of the Trust Game. In this game, the trustee partner can repay the child’s initial investment or keep everything and betray the trustor. In two studies, we addressed whether trust is modulated by trustees exhibiting prosocial versus antisocial behaviors (Study 1, ‘helpers and hinderers’), or respect-based versus fear-based power (Study 2, ‘leaders and bullies’). Preschoolers trusted the leader more than the bully, and trusted the hinderer less than a neutral agent, but did not yet trust the helper more than the hinderer. The tendency to trust helpers more than hinderers increased with age as a result of the increased propensity to trust the prosocial agent. In Study 3, a group of preschoolers played the Dictator Game, a measure of pure generosity, with the same agents used for Study 1. Sharing rates were reliably lower than in Study 1, suggesting that the rates of investment in the trust game cannot be due solely to altruistic or indirect reciprocity motives. Overall, these findings indicate that, by age five, children understand complex cooperative exchanges and start relying on socio-moral information when deciding whom to trust.
A Stochastic Control Approach to Option Market Making
