On the Effect of Incentive Schemes on Trust and Trustworthiness

Christine Harbring

Journal of Institutional and Theoretical Economics (JITE), 2010, vol. 166, issue 4, 690-714

Abstract: We experimentally analyze whether being exposed to different incentive schemes induces subjects to change their behavior. In particular, we investigate the effect on trust and trustworthiness measured by conducting an investment game. We implement two simple incentive schemes modeling the basic characteristics of a cooperative incentive environment in which payoffs are based on a group's performance, as well as a competitive environment in which payoffs result from individuals' relative performances. Our results indicate that trust and the expectation of trust are positively affected by being exposed to a team setting compared to a competitive tournament scheme.

JEL-codes: C9 D23 J33 L23 M52 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (12)

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