Trust and Trustworthiness under the Prospect Theory: A field experiment in Vietnam

Quang Nguyen, Marie Claire Villeval and Hui Xu
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Hui Xu: GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne - ENS de Lyon - École normale supérieure de Lyon - Université de Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet - Saint-Étienne - CNRS - Centre National de la Recherche Scientifique

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Abstract: We study the influence of risk and time preferences on trust and trustworthiness by conducting a field experiment in Vietnamese villages and by estimating the parameters of the Cumulative Prospect Theory and of quasi-hyperbolic time preferences. We find that while probability sensitivity or risk aversion do not affect trust, loss aversion influences trust indirectly by lowering the expectations of return. Also, more risk averse and less present biased participants are found to be trustworthier. The experience of receiving remittances influences behavior and a longer exposure to a collectivist economy tend to reduce trust and trustworthiness.

Keywords: Trust; trustworthiness; risk preferences; time preferences; Cumulative Prospect Theory; Vietnam; field experiment (search for similar items in EconPapers)
Date: 2012-09-10
New Economics Papers: this item is included in nep-cbe, nep-evo, nep-exp, nep-soc, nep-tra and nep-upt
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00730609v1
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Citations: View citations in EconPapers (5)

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Working Paper: Trust and Trustworthiness under the Prospect Theory: A field experiment in Vietnam (2012)
Working Paper: Trust and Trustworthiness under the Prospect Theory: A Field Experiment in Vietnam (2012)
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