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Short- and Long-run Effects of External Interventions on Trust

Author

Listed:
  • Igor Asanov

    () (Department of Economics, University of Kassel)

  • Simone Vannuccini

    () (School of Economics and Business Administration, Friedrich-Schiller-University Jena)

Abstract

We experimentally analyze the effects of external interventions such as subsidy and targeting on investment decisions during the intervention and after. We employ a multi-period version of the trust (investment) game (Berg et al., 1995) introducing either the monetary incentives for contribution or providing a suggestion about the level of investment. The results of the experiment indicate that targeting is an effective instrument to promote trustful behavior, whereas subsidy policy is not effective both in short- and long-run. Therefore we suggest considering a targeting policy as one of the instruments that can foster trustful behavior.

Suggested Citation

  • Igor Asanov & Simone Vannuccini, 2015. "Short- and Long-run Effects of External Interventions on Trust," Jena Economic Research Papers 2015-013, Friedrich-Schiller-University Jena.
  • Handle: RePEc:jrp:jrpwrp:2015-013
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    References listed on IDEAS

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    Cited by:

    1. Rahul Mehrotra & Vincent Somville & Lore vandewalle, 2016. "Increasing trust in the bank to enhance savings: Experimental evidence from India," CMI Working Papers 1, CMI (Chr. Michelsen Institute), Bergen, Norway.

    More about this item

    Keywords

    Trust Game; Experiment; Policy; Subsidy; Academic Spin-offs;

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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