TRUST GAMES, THE MORAL OF THE STORY

Abstract. This paper applies moral principles, along the line of Kant and Rawls, to explain other‐regarding behaviour in laboratory trust games. I develop a framework similar to that of Charness & Rabin (2000) and test the predictions of moral decision that are based on Rawls's allocation principles of equity, efficiency and merits. Three experimental designs for the three principles are carried out. Predictions that are based on equity and efficiency receive strong supports while prediction that is based on merits receive only weak support.