This paper examines how selection affects trust and altruism in a Trust and Modified Dictator Game. Past Trust and Dictator
game experiments not allowing partner selection show substantially more trust and altruism than equilibrium predicts. We predict
partner selection will cause sorting in which behavior across partner types without selection will be positively correlated
with partner choice. This selection pattern will cause trust and altruism to be higher with selection and the increase will
be proportional to a maximum possible gain. We find selection has all these effects. We also find greater gains in the Trust
than Modified Dictator game consistent with larger possible gains in the Trust game. The results imply that theories ignoring
selection will underestimate trust and altruism in markets with selection.
Keywords Selection - Trust - Altruism - Experimental economics
JEL Codes C7, C9