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. 2025. 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. 92 (2), pp. 434-469. https://doi.org/10.1002/soej.12758
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 dates
Online23 Jan 2025
PrintOct 2025
Publication process dates
Submitted13 Jun 2022
Accepted07 Nov 2024
Deposited27 Nov 2024
Output statusPublished
Publisher's version
License
File Access Level
Open
Copyright Statement

© 2025 The Author(s). Southern Economic Journal published by Wiley Periodicals LLC on behalf of The Southern Economic Association.
This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.

Digital Object Identifier (DOI)https://doi.org/10.1002/soej.12758
Related Output
Is new version ofhttps://doi.org/10.31219/osf.io/wmejt
LanguageEnglish
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