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Trust and Trustworthiness under the Prospect Theory: A Field Experiment in Vietnam

Quang Nguyen (), Marie Claire Villeval () and Hui Xu ()
Additional contact information
Hui Xu: Beijing Normal University

No 6851, IZA Discussion Papers from Institute of Labor Economics (IZA)

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: risk preferences; time preferences; Cumulative Prospect Theory; Vietnam; trustworthiness; trust; field experiment (search for similar items in EconPapers)
JEL-codes: C91 C93 D81 D90 O10 O53 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev, nep-evo, nep-exp, nep-sea, nep-soc and nep-upt
Date: 2012-09
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Related works:
Working Paper: Trust and Trustworthiness under the Prospect Theory: A field experiment in Vietnam (2016)
Working Paper: Trust and Trustworthiness under the Prospect Theory: A field experiment in Vietnam (2012) Downloads
Working Paper: Trust and Trustworthiness under the Prospect Theory: A field experiment in Vietnam (2012) Downloads
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