When the rich do (not) trust the (newly) rich: experimental evidence on the effects of positive random shocks in the trust game
Article
Bejarano, H., Gillet, J. and Rodriguez-Lara, I. 2024. When the rich do (not) trust the (newly) rich: experimental evidence on the effects of positive random shocks in the trust game. Southern Economic Journal.
Type | Article |
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Title | When the rich do (not) trust the (newly) rich: experimental evidence on the effects of positive random shocks in the trust game |
Authors | Bejarano, H., Gillet, J. and Rodriguez-Lara, I. |
Abstract | We study behavior in a trust game where first-movers initially have a higher endowment than second-movers but the occurrence of a positive random shock can eliminate this inequality by increasing the endowment of the second-mover before the decision of the first-mover. We find that second-movers return less (i.e., they are less trustworthy) when they have a lower endowment than first-movers, compared with the case in which first and second-movers have the same endowment. In addition, second-movers who experience the positive shock return more than second-movers who have the same endowment as the first-mover from the outset. First-movers do not seem to anticipate this behavior from second-movers. They send less to second-movers who benefited from a shock. Our findings suggest that in addition to the distribution of the endowments the source of this distribution plays an important role in determining the levels of trust and trustworthiness. |
Keywords | Trust game; endowment heterogeneity; random shocks; luck |
Sustainable Development Goals | 10 Reduced inequalities |
Middlesex University Theme | Sustainability |
Publisher | Wiley |
Journal | Southern Economic Journal |
ISSN | 0038-4038 |
Electronic | 2325-8012 |
Publication process dates | |
Accepted | 18 Nov 2024 |
Deposited | 27 Nov 2024 |
Output status | Accepted |
Accepted author manuscript | File Access Level Open |
Language | English |
https://repository.mdx.ac.uk/item/1wqz85
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