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Journal of Applied Mathematics
Volume 2015 (2015), Article ID 234528, 12 pages
http://dx.doi.org/10.1155/2015/234528
Research Article

Intermediaries in Trust: Indirect Reciprocity, Incentives, and Norms

1Department of Social Studies, Linnaeus University, Universitetsplatsen 1, 35195 Växjö, Sweden
2Department of Economics and Management, University of Brescia, Via San Faustino 74B, 25122 Brescia, Italy
3MTA TK Lendület Research Center for Educational and Network Studies (RECENS), Hungarian Academy of Sciences, Országház Utca 30, Budapest 1014, Hungary

Received 2 September 2014; Accepted 4 December 2014

Academic Editor: Vincent Buskens

Copyright © 2015 Giangiacomo Bravo et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

Any trust situation involves a certain amount of risk for trustors that trustees could abuse. In some cases, intermediaries exist who play a crucial role in the exchange by providing reputational information. To examine under what conditions intermediary opinion could have a positive impact on cooperation, we designed two experiments based on a modified version of the investment game where intermediaries rated the behaviour of trustees under various incentive schemes and different role structures. We found that intermediaries can increase trust if there is room for indirect reciprocity between the involved parties. We also found that the effect of monetary incentives and social norms cannot be clearly separable in these situations. If properly designed, monetary incentives for intermediaries can have a positive effect. On the one hand, when intermediary rewards are aligned with the trustor’s interest, investments and returns tend to increase. On the other hand, fixed monetary incentives perform less than any other incentive schemes and endogenous social norms in ensuring trust and fairness. These findings should make us reconsider the mantra of incentivization of social and public conventional policy.