A trust game in loss domain

Ola Kvaløy and Miguel Luzuriaga ()
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Miguel Luzuriaga: UiS, Postal: University of Stavanger, NO-4036 Stavanger, Norway

No 2014/6, UiS Working Papers in Economics and Finance from University of Stavanger

Abstract: In standard trust games, no trust is the default, and trust generates a potential gain. We investigate a reframed trust game in which full trust is default and where no trust generates a loss. We find significantly lower levels of trust and trustworthiness in loss domain when full trust is default than in gain domain when no trust is default. As a consequence, trust is on average profitable in gain domain, but not in loss domain. We also find that subjects respond more positively to higher trust in loss domain than in gain domain.

Keywords: Trust; Reciprocity; Framing; Defaults; Reference Points; Experiment (search for similar items in EconPapers)
JEL-codes: C72 C91 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2014-06-10
New Economics Papers: this item is included in nep-exp, nep-gth, nep-hpe and nep-soc
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Related works:
Journal Article: A trust game in loss domain (2017)
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