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.
TypeArticle
TitleWhen the rich do (not) trust the (newly) rich: experimental evidence on the effects of positive random shocks in the trust game
AuthorsBejarano, 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.

KeywordsTrust game; endowment heterogeneity; random shocks; luck
Sustainable Development Goals10 Reduced inequalities
Middlesex University ThemeSustainability
PublisherWiley
JournalSouthern Economic Journal
ISSN0038-4038
Electronic2325-8012
Publication process dates
Accepted18 Nov 2024
Deposited27 Nov 2024
Output statusAccepted
Accepted author manuscript
File Access Level
Open
LanguageEnglish
Permalink -

https://repository.mdx.ac.uk/item/1wqz85

Restricted files

Accepted author manuscript

  • 5
    total views
  • 3
    total downloads
  • 2
    views this month
  • 0
    downloads this month

Export as

Related outputs

Is voting for a cartel a sign of cooperativeness?
Gillet, J. 2021. Is voting for a cartel a sign of cooperativeness? Games. 12 (2), pp. 1-10. https://doi.org/10.3390/g12020048
Trust and trustworthiness after negative random shocks
Bejarano, H., Gillet, J. and Rodriguez-Lara, I. 2021. Trust and trustworthiness after negative random shocks. Journal of Economic Psychology. 86. https://doi.org/10.1016/j.joep.2021.102422
Do negative random shocks affect trust and trustworthiness?
Bejarano, H., Gillet, J. and Rodriguez-Lara, I. 2018. Do negative random shocks affect trust and trustworthiness? Southern Economic Journal. 85 (2), pp. 563-579. https://doi.org/10.1002/soej.12302
Leadership by example in the weak-link game
Cartwright, E., Gillet, J. and Van Vugt, M. 2013. Leadership by example in the weak-link game. Economic Inquiry. 51 (4), pp. 2028-2043. https://doi.org/10.1111/ecin.12003
Selfish or servant leadership? Evolutionary predictions on leadership personalities in coordination games
Gillet, J., Cartwright, E. and van Vugt, M. 2011. Selfish or servant leadership? Evolutionary predictions on leadership personalities in coordination games. Personality and Individual Differences. 51 (3), pp. 231-236. https://doi.org/10.1016/j.paid.2010.06.003
Cartel formation and pricing: the effect of managerial decision-making rules
Gillet, J., Schram, A. and Sonnemans, J. 2011. Cartel formation and pricing: the effect of managerial decision-making rules. International Journal of Industrial Organization. 29 (1), pp. 126-133. https://doi.org/10.1016/j.ijindorg.2010.03.015
The tragedy of the commons revisited: the importance of group decision-making
Gillet, J., Schram, A. and Sonnemans, J. 2009. The tragedy of the commons revisited: the importance of group decision-making. Journal of Public Economics. 93 (5-6), pp. 785-797. https://doi.org/10.1016/j.jpubeco.2009.02.001