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Rewarding Trust: An Experimental Study

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Abstract

The issue of trust has recently attracted growing attention in research on work relations, capital – owner relations, cultural influences on the economic structures of different countries, and other topics. This paper analyzes a simple experiment on trust and the reward of trust. Mr A is endowed with DM 80. He decides to trust Ms B (and give her his money) or not. Ms B is able to double the sum of money (if she gets it) and can then decide to give back as much as she likes. In an experiment, 76% of subjects A decided to trust. The average reward they received was DM 79.2 which is not significantly different from DM 80, the value of mistrust; nor was the average reward different from the average expectations of subjects A, i.e. a weak variant of the Rational Expectations Hypothesis is supported. In the paper we also look for differences between trusting and mistrusting A-subjects, for behavioral norms, and other determinants of rewards.

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Bolle, F. Rewarding Trust: An Experimental Study. Theory and Decision 45, 83–98 (1998). https://doi.org/10.1023/A:1004930101743

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  • DOI: https://doi.org/10.1023/A:1004930101743

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