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The Elasticity Of Trust: Evidence From Kuwait, Oman, Switzerland, The United Arab Emirates And The United States

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Author Info

  • Iris Bohnet

    ()
    (Kennedy School of Government, Harvard University)

  • Benedikt Herrmann

    ()
    (School of Economics, University of Nottingham)

  • Richard Zeckhauser

    ()
    (Kennedy School of Government, Harvard University)

Abstract

This paper employs experiments to determine how effectively arrangements decreasing the expected cost of trust betrayal foster trust in three Gulf countries (Kuwait, Oman and the United Arab Emirates), and two Western countries (Switzerland and the United States). Our basic instrument elicits subjects’ minimum acceptable probabilities for trustworthiness that would make them just willing to trust. Trust proves more elastic to the likelihood and the cost of betrayal in the West than in the Gulf. Risk aversion and betrayal aversion contribute to this difference. The disparities between the West and the Gulf are driven more by men than by women.

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Bibliographic Info

Paper provided by The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham in its series Discussion Papers with number 2005-15.

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Date of creation: Sep 2005
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Handle: RePEc:cdx:dpaper:2005-15

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Keywords: Trust; betrayal aversion; gender differences; in-group preferences;

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