Trust, Inequality and the Market
31 Pages Posted: 9 Apr 2009
Date Written: April 1, 2009
We present an experimental investigation of how inequality affects trust and trustworthiness in non market and in market settings. We consider three experimental treatments, one with inequality, one with inequality but no knowledge of the income of other agents, and one with inequality and knowledge. Inequality, particularly when it is known, has a corrosive effect on trusting behaviors in this experiment. Agents appear to be less sensitive to known income differentials in markets than they are in the non market settings, but trust in markets appears generally more vulnerable to the introduction of inequality than in non market settings.
Keywords: trust, income inequality, market, social capital
JEL Classification: C72, C91, Z13
Suggested Citation: Suggested Citation