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Trust and Trustworthiness Under The Prospect Theory and Quasi-Hyperbolic Preferences: A Field Experiment in Vietnam

Author

Listed:
  • Quang NGUYEN

    (Division of Economics, Nanyang Technological University, Singapore 637332, Singapore)

  • Marie Claire VILLEVAL

    (University of Lyon, F-69007, France; CNRS, GATE, 93, ChemindesMouilles, F-69130, Ecully, France; IZA, Bonn, Germany)

  • Hui XU

    (University of Lyon, F-69007, France; CNRS, GATE, 93, ChemindesMouilles, F-69130, Ecully, France. Beijing Normal University,19 XinjiekouWai Street, Beijing 100875, P. R. China.)

Abstract

This study incorporates risk, time, and social preferences. We conduct a field experiment in Vietnamese villages and estimate the effect of the Cumulative Prospect Theory and of quasi-hyperbolic time preferences parameters on trust and trustworthiness. We find that both probability sensitivity and risk aversion are not related to trust. Yet, more risk averse and less present biased participants are found to be trustworthier. People with longer exposure to a collectivist economy tend to have a lower level of trust and trustworthiness.

Suggested Citation

  • Quang NGUYEN & Marie Claire VILLEVAL & Hui XU, 2013. "Trust and Trustworthiness Under The Prospect Theory and Quasi-Hyperbolic Preferences: A Field Experiment in Vietnam," Economic Growth Centre Working Paper Series 1301, Nanyang Technological University, School of Social Sciences, Economic Growth Centre.
  • Handle: RePEc:nan:wpaper:1301
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    File URL: http://www3.ntu.edu.sg/hss2/egc/wp/2013/2013-01.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Trust; Trustworthiness; Cumulative Prospect Theory; Risk preferences; Time preferences; Quasi–hyperbolic preferences; Vietnam; Field experiment;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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