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The Interplay Of Inequality And Reference Dependence With Trust An Experimental Study

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  • Gilles Grolleau
  • Sana El Harbi
  • Hayet Saadaoui
  • Angela Sutan

Abstract

type="main"> Using a canonical trust game, we investigate whether the inequality of endowment between trustor and trustee and the acquired versus permanent financial state affect trust and trustworthiness. We found that trust and trustworthiness are reference-dependent and that individuals with permanent financial state receive more trust and are more trustworthy than others. In our experiment, unequal endowments do not significantly affect trust, but trustworthiness increases significantly when the trustor is poorer.

Suggested Citation

  • Gilles Grolleau & Sana El Harbi & Hayet Saadaoui & Angela Sutan, 2016. "The Interplay Of Inequality And Reference Dependence With Trust An Experimental Study," Bulletin of Economic Research, Wiley Blackwell, vol. 68(2), pages 117-123, April.
  • Handle: RePEc:bla:buecrs:v:68:y:2016:i:2:p:117-123
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    1. Greiner, Ben & Ockenfels, Axel & Werner, Peter, 2012. "The dynamic interplay of inequality and trust—An experimental study," Journal of Economic Behavior & Organization, Elsevier, vol. 81(2), pages 355-365.
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    5. Bac, Mehmet, 2009. "Generalized trust and wealth," International Review of Law and Economics, Elsevier, vol. 29(1), pages 46-56, March.
    6. Smith, Alexander, 2011. "Income inequality in the trust game," Economics Letters, Elsevier, vol. 111(1), pages 54-56, April.
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