The dynamic interplay of inequality and trust—An experimental study

Ben Greiner, Axel Ockenfels and Peter Werner

Journal of Economic Behavior & Organization, 2012, vol. 81, issue 2, 355-365

Abstract: We study the interplay of inequality and trust in a dynamic growth game, in which trust increases efficiency and thus allows higher growth of the laboratory economy in the future. We find that trust (as measured by the percentage of wealth invested in a trust game) is initially high in a treatment starting with equal endowments, but decreases over time. In a treatment with unequal endowments, trust is initially lower yet more robust. The disparity of wealth distributions across economies mitigates over time. Our findings suggest that both the level and the (exogenous or endogenous) source of inequality matters for the dynamics of trust.

Keywords: Inequality; Trust; Growth; Laboratory experiments (search for similar items in EconPapers)
JEL-codes: C92 D31 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (21)

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Related works:
Working Paper: The Dynamic Interplay of Inequality and Trust – An Experimental Study (2007)
Working Paper: The Dynamic Interplay of Inequality and Trust - An Experimental Study (2007)
Working Paper: The Dynamic Interplay of Inequality and Trust - An Experimental Study (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:81:y:2012:i:2:p:355-365

DOI: 10.1016/j.jebo.2011.11.004

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