Journal article
TRUST, RECIPROCITY, AND RULES
Economic inquiry, Vol.56(3), pp.1526-1542
07/01/2018
DOI: 10.1111/ecin.12512
Abstract
Many economic interactions rely on trust and trust violations can have serious economic consequences. Simple minimum standard rules are attractive because they prevent egregious trust violations. However, they may undermine more trusting and reciprocal (trustworthy) behavior that otherwise would have occurred, leading to worse outcomes. In an experimental trust game, we test the efficacy of exogenously imposed minimum standard rules. Rules damage trust and reciprocity, reducing economic welfare. While sufficiently restrictive rules restore welfare, trust and reciprocity never return. Results indicate that participants are concerned about payoffs while also using the game to learn about trust and trustworthiness of others. (JEL C72, C90, D63, D64, L51)
Details
- Title: Subtitle
- TRUST, RECIPROCITY, AND RULES
- Creators
- Thomas A. Rietz - University of IowaEric Schniter - Chapman UniversityRoman M. Sheremeta - Case Western Reserve UniversityTimothy W. Shields - Chapman University
- Resource Type
- Journal article
- Publication Details
- Economic inquiry, Vol.56(3), pp.1526-1542
- Publisher
- Wiley
- DOI
- 10.1111/ecin.12512
- ISSN
- 0095-2583
- eISSN
- 1465-7295
- Number of pages
- 17
- Grant note
- name: Economic Science Institute Internal Research Funds
- Language
- English
- Date published
- 07/01/2018
- Academic Unit
- Finance
- Record Identifier
- 9984380389602771
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