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Trust, trustworthiness and selection into the financial industry

Author

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  • Gill, Andrej
  • Heinz, Matthias
  • Schumacher, Heiner

Abstract

We examine trust and trustworthiness of individuals with varying professional preferences and experiences. Our subjects study business and economics in Frankfurt, the financial center of Germany and continental Europe. In the trust game, subjects with a high interest in working in the financial industry return 25 percent less than subjects with a low interest. We find no evidence that the extent of professional experience in the financial industry has a negative impact on trustworthiness. We also do not find any evidence that the financial industry screens out less trustworthy individuals in the hiring process. In a prediction game that is strategically equivalent to the trust game, the amount sent by first-movers was significantly smaller when the second-mover indicated a high interest in working in finance. These results suggest that the financial industry attracts less trustworthy individuals, which may contribute to the current lack of trust in its employees.

Suggested Citation

  • Gill, Andrej & Heinz, Matthias & Schumacher, Heiner, 2014. "Trust, trustworthiness and selection into the financial industry," CFS Working Paper Series 458, Center for Financial Studies (CFS).
    • Handle: RePEc:zbw:cfswop:458
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    More about this item

    Keywords

    Trust; Trustworthiness; Selection; Financial Industry;
    All these keywords.

    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • G2 - Financial Economics - - Financial Institutions and Services
    • M5 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics

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