We designed an experiment to study trust and reciprocity in an investm
ent setting. This design controls for alternative explanations of beha
vior including repeat game reputation effects, contractual precommitme
nts, and punishment threats. Observed decisions suggest that reciproci
ty exists as a basic element of human behavior and that this is accoun
ted for in the trust extended to an anonymous counterpart. A second tr
eatment, social history, identifies conditions which strengthen the re
lationship between trust and reciprocity. (C) 1995 Academic Press, Inc
.