Increasing Trust in Bankers to Enhance Savings: Experimental Evidence from India

Rahul Mehrotra, Vincent Somville and Lore Vandewalle

Economic Development and Cultural Change, 2021, vol. 69, issue 2, 623 - 644

Abstract: According to economic theory, repeated interactions can play a crucial role in shaping trust. We randomly allocated people to treatments that promote interactions with bankers. Next, these people played incentivized trust games with their own banker and with an anonymous other banker. While the effect on trust in their own banker is limited, the impact on trust in other bankers is important. We also find that account savings strongly associate with trust in one’s own banker. Our experiment suggests that trust in one’s banker matters for savings but that it is more difficult to influence than trust in bankers in general.

Date: 2021
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