Growing interest in using personality variables in economic research leads to the question whether personality as measured by psychology is useful to predict economic behavior. Is it reasonable to expect values on personality scales to be predictive of behavior in economic games? It is undoubted that personality can influence large-scale economic outcomes. Whether personality variables can also be used to understand micro-behavior in economic games is however less clear. We discuss reasons in favor and against this assumption and test in our own experiment, whether and which personality factors are useful in predicting behavior in the trust or investment game. We can also use the trust game to understand how personality measures fare relatively in predicting behavior when situational constraints vary in strength. This approach can help economists to better understand what to expect from the inclusion of personality variables in their models and experiments, and where further research might be useful and needed.

Big Five, Five Factor Model, experiment, personality, trust game
Laboratory, Individual Behavior (jel C91), Behavioral Economics; Underlying Principles (jel D03)
Tinbergen Institute
hdl.handle.net/1765/32102
Tinbergen Institute Discussion Paper Series
Discussion paper / Tinbergen Institute
Tinbergen Institute

Müller, J, & Schwieren, C. (2012). What can the Big Five Personality Factors contribute to explain Small-Scale Economic Behavior? (No. TI 2012-028/1). Discussion paper / Tinbergen Institute (pp. 1–24). Tinbergen Institute. Retrieved from http://hdl.handle.net/1765/32102