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Induced heterogeneity in trust experiments

  • Lisa Anderson


  • Jennifer Mellor


  • Jeffrey Milyo


Several non-experimental studies claim that heterogeneity among individuals reduces trust. A few experimental studies have examined the effects of naturally-occurring differences among subjects on trusting behavior, and in contrast, most have not supported these claims. We adopt a novel approach by inducing heterogeneity among subjects in a canonical trust experiment. We accomplish this by varying the show-up payments given to subjects for participating in the experiment. We find that this induced inequality does not consistently affect first- or second-mover behavior in the classic trust game in the manner predicted by either previous theoretical work or empirical studies of survey-based measures of trust. Further, the effect of inequality on trust, in terms of both sign and significance, depends on whether show-up payments are awarded publicly or privately. Copyright Economic Science Association 2006

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Article provided by Springer in its journal Experimental Economics.

Volume (Year): 9 (2006)
Issue (Month): 3 (September)
Pages: 223-235

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Handle: RePEc:kap:expeco:v:9:y:2006:i:3:p:223-235
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