Trust is indispensable to fiduciary fields (e.g., credit rating), where experts exercise wide discretion on others behalf. Can the shame from scandal sort trustworthy people out of a fiduciary field? I tested for the possibility in a charitable contribution game where subjects could be "ungenerous" when unobserved. After establishing that "generosity" required a contribution of more than $6, subjects were given the choice of contributing either $5 publicly or $0-$10 privately. Almost all control subjects chose to contribute privately less than $2. The majority of treatment subjects, after being told the prediction that they were unlikely to contribute more than $2, if they contributed privately, contributed $5 publicly. This suggests that the mere belief that a subject would exploit the greater discretion and unobservability of a fiduciary-like position can deter entry into such a position. Thus, scandals that create such a belief could repel shame-sensitive people from that field -- possibly to the detriment of the field and the economy as a whole. The shame externality of a scandals on private judgments may also been seen in politically correct speech after demonstrated racial prejudice of others.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
16523.
Find related papers by JEL classification: H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods H41 - Public Economics - - Publicly Provided Goods - - - Public Goods C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.: