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The glue of the economic system: the effect of relational goods on trust and trustworthiness

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  • Leonardo Becchetti

    ()

  • Giacomo Degli Antoni

    ()

  • Marco Faillo

    ()

  • Luigi Mittone

    ()

Abstract

The role of �relational goods� is almost unexplored in the literature, yet our experimental results document that, even in their weakest form (opportunity of meeting an unknown player at the end of an experimental game), they significantly affect important �lubricants� of economic activity such as trust and trustworthiness and generate significant departures from the standard Nash equilibrium outcome in trust (investment) games. Our findings suggest that relational goods are an important �source of energy� in economic interactions and that the study of this �neglected particle� of socioeconomic life may produce significant advancements on both positive and normative economics.

Suggested Citation

  • Leonardo Becchetti & Giacomo Degli Antoni & Marco Faillo & Luigi Mittone, 2007. "The glue of the economic system: the effect of relational goods on trust and trustworthiness," CEEL Working Papers 0705, Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia.
  • Handle: RePEc:trn:utwpce:0705
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    File URL: http://www-ceel.economia.unitn.it/papers/papero07_05.pdf
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    References listed on IDEAS

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    1. Gary Charness & Matthew Rabin, 2002. "Understanding Social Preferences with Simple Tests," The Quarterly Journal of Economics, Oxford University Press, vol. 117(3), pages 817-869.
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    3. Ernst Fehr & Georg Kirchsteiger & Arno Riedl, 1993. "Does Fairness Prevent Market Clearing? An Experimental Investigation," The Quarterly Journal of Economics, Oxford University Press, vol. 108(2), pages 437-459.
    4. Edward L. Glaeser & David I. Laibson & José A. Scheinkman & Christine L. Soutter, 2000. "Measuring Trust," The Quarterly Journal of Economics, Oxford University Press, vol. 115(3), pages 811-846.
      • Glaeser, Edward Ludwig & Laibson, David I. & Scheinkman, Jose A. & Soutter, Christine L., 2000. "Measuring Trust," Scholarly Articles 4481497, Harvard University Department of Economics.
    5. James Andreoni, 2001. "Giving According to GARP," Theory workshop papers 339, UCLA Department of Economics.
    6. Buchan, Nancy R. & Johnson, Eric J. & Croson, Rachel T.A., 2006. "Let's get personal: An international examination of the influence of communication, culture and social distance on other regarding preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 60(3), pages 373-398, July.
    7. Bohnet, Iris & Frey, Bruno S., 1999. "The sound of silence in prisoner's dilemma and dictator games," Journal of Economic Behavior & Organization, Elsevier, vol. 38(1), pages 43-57, January.
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    Cited by:

    1. repec:spr:grdene:v:24:y:2015:i:4:d:10.1007_s10726-014-9409-3 is not listed on IDEAS
    2. Lotito, Gianna & Migheli, Matteo & Ortona, Guido, 2011. "An experimental inquiry into the nature of relational goods," POLIS Working Papers 160, Institute of Public Policy and Public Choice - POLIS.
    3. Leonardo Becchetti & Giacomo Degli Antoni & Marco Faillo, 2010. "Social Distance, Cooperation and Other Regarding Preferences: A New Approach Based on the Theory of Relational Goods," Econometica Working Papers wp18, Econometica.
    4. Becchetti, Leonardo & Degli Antoni, Giacomo, 2010. "The sources of happiness: Evidence from the investment game," Journal of Economic Psychology, Elsevier, vol. 31(4), pages 498-509, August.

    More about this item

    Keywords

    relational goods; trust; experimental games;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values

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