Can Groups Be Trusted? An Experimental Study of Collective Trust

Several previous studies measure the extent to which individuals trust other individuals and argue that individual trust is an important element of interaction in organizations and markets. However, a related topic is the extent to which it is possible for individuals to trust groups as separate entities. This concept, referred to as collective trust, has been previously discussed but not carefully demonstrated. We conduct experiments that specifically address the question of whether it is possible for individuals to exhibit trust for a group, beyond the trust they exhibit for individual members of that group. Using the trust (or investment) game, our results show that individuals exhibit collective trust: They transfer perceptions of trustworthiness to individuals based on previous experiences with members of that individual’s group, even with a very minimal form of group membership. JEL Classification: C92