The Causal Effect of Market Participation on Trust: An Experimental Investigation Using Randomized Control

Al‐Ubaydli, Omar; Houser, Daniel; Nye, John V. C.; Paganelli, Maria Pia; Pan, Xiaofei

doi:10.2139/ssrn.1937270

Cited by 7 publications

(4 citation statements)

References 14 publications

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“…The authors conjecture that this may be due to the fact that more market exposed subjects had the experience of mutually beneficial exchanges with strangers, much like in the anonymous experimental settings. A very different piece of evidence consistent with this interpretation is that subjects who were exposed to unobtrusive priming with words relating to markets and exchange prior to playing a Trust Game were more likely to trust their partner than were subjects exposed to primes unrelated to markets (Al-Ubaydli, Houser, Nye, et al (2011)).…”

Section: Crowding Inmentioning

confidence: 99%

Economic Incentives and Social Preferences: Substitutes or Complements?

Bowles

Polanía-Reyes

2012

Journal of Economic Literature

736

474

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Explicit economic incentives designed to increase contributions to public goods and to promote other pro-social behavior sometimes are counterproductive or less effective than would be predicted among entirely self-interested individuals. This may occur when incentives adversely affect individuals' altruism, ethical norms, intrinsic motives to serve the public, and other social preferences. The opposite also occurs—crowding in —though it appears less commonly. In the fifty experiments that we survey, these effects are common, so that incentives and social preferences may be either substitutes (crowding out) or complements (crowding in). We provide evidence for four mechanisms that may account for these incentive effects on preferences: namely that incentives may (i) provide information about the person who implemented the incentive, (ii) frame the decision situation so as to suggest appropriate behavior, (iii) compromise a control averse individual's sense of autonomy, and (iv) affect the process by which people learn new preferences. An implication is that the evaluation of public policy must be restricted to allocations that are supportable as Nash equilibria when account is taken of these crowding effects. We show that well designed fines, subsidies, and the like minimize crowding out and may even do the opposite, making incentives and social preferences complements rather than substitutes. (JEL D02, D03, D04, D83, E61, H41, Z13)

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Section: Crowding Inmentioning

confidence: 99%

Economic Incentives and Social Preferences: Substitutes or Complements?

Bowles

Polanía-Reyes

2012

Journal of Economic Literature

736

474

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“…For example, Henrich et al () find that a higher degree of market integration is associated with higher trust based on experimental data gathered from small‐scale societies that heavily rely on the primary sector. Al‐Ubaydli et al () compare a treatment group who were primed about market‐related activities and a control group without priming, and find that the treatment group is more trusting than the control group.…”

Section: Literature On Trust and Market Experiencementioning

confidence: 99%

Market Activities and Trust of North Korean Refugees

Kim

2019

Asian Economic Policy Review

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This study investigates the effects of North Koreans' informal market activities on their trust. Using survey data on North Korean refugees living in South Korea, we find that North Korean refugees who previously traded goods in markets in North Korea have higher trust in most people. By contrast, the experience of trading in markets did not affect trust in other North Korean refugees, suggesting little evidence of in-group favoritism. Our main result is robust when we apply the instrument variable approach. This finding suggests the possibility that increased marketization in North Korea leads to a weakened control of the authorities over the North Korean society.

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Section: Crowding Inmentioning

confidence: 99%

Economic Incentives and Social Preferences: Substitutes or Complements? <i>Part 2</i>

Bowles

Polanía-Reyes

2013

Vopr. èkon.

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In the second part of the paper concrete forms and examples of the effects of incentives on the social preferences are shown and experiments are described where these effects occur. The authors claim that the negative consequences of the incentives are connected less to the incentives themselves as, rather, with their perceptions among the agents. That is why for a reasonable use of incentives one has to take account of possible effects of such perceptions.

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The Causal Effect of Market Participation on Trust: An Experimental Investigation Using Randomized Control

Cited by 7 publications

References 14 publications

Economic Incentives and Social Preferences: Substitutes or Complements?

Economic Incentives and Social Preferences: Substitutes or Complements?

Market Activities and Trust of North Korean Refugees

Economic Incentives and Social Preferences: Substitutes or Complements? <i>Part 2</i>

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