Effects of Inequality on Trust and Reciprocity: An Experiment With Real Effort.

ABSTRACT: The purpose of this paper is analyzing whether trust and reciprocity are affected by how rich the partner is or how well the partner performed several tasks with real effort. A trust game (TG) experiment is designed with three treatments. First, a baseline Treatment B in which subjects play a finitely repeated TG. Second, in a Treatment H with history, subjects know the partner's wealth level reached in the past. Third, in a Treatment E with effort the individual endowment with which the TG is played is endogenous and results from the subject's performance in three different real effort tasks (maths, cognitive and general knowledge related). The data analysis highlights the importance of past wealth levels (Treatment H) as well as endowment heterogeneity (Treatment E), on the actual levels

SUBMITTER: Rodrigo-Gonzalez A 

PROVIDER: S-EPMC8674586 | biostudies-literature | 2021

REPOSITORIES: biostudies-literature