We had a great departmental seminar today with Alessandra Cassar reporting on experiments done in Italy and Kosovo.  She and co-author ask whether playing a “trade game” where some players have an impartial enforcement mechanism and other players have a pay-in-advance partial enforcement mechanism affects subsequent willingness to pay “generalized trust”… and indeed it does… players with the impartial mechanism seem to become more trusting of the other players.  That is, there is an institutional spillover effect onto a different game.

My colleagues John Ifcher and Homa Zarghamee recently published a paper on how mood/affect changes decisions about patience, and I assume there is a growing body of evidence now about the short-term mutability of underlying preferences… what is needed now is some theory about how short-term effects aggregate up to longer-term enduring background preferences.  Because another literature finds that historical events seem to leave enduring spillovers on preferences.

An interesting area for theory.