Trust, Inequality and the Market

31 Pages Posted: 9 Apr 2009  

Shaun P. Hargreaves Heap

University of East Anglia (UEA) - School of Economic and Social Studies

Jonathan H. W. Tan

Nottingham University Business School

Daniel John Zizzo

BENC and Newcastle University Business School, Newcastle University

Date Written: April 1, 2009

Abstract

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

Hargreaves Heap, Shaun P. and Tan, Jonathan H. W. and Zizzo, Daniel John, Trust, Inequality and the Market (April 1, 2009). Available at SSRN: https://ssrn.com/abstract=1374844 or http://dx.doi.org/10.2139/ssrn.1374844

Shaun Hargreaves Heap

University of East Anglia (UEA) - School of Economic and Social Studies ( email )

Norwich, Norfolk NR4 7TJ
United Kingdom
+44 (0)1603 593417 (Phone)

HOME PAGE: http://www.uea.ac.uk/soc/econ/people/hargreavesheap_s.shtml

Jonathan H. W. Tan

Nottingham University Business School ( email )

Jubilee Campus
Wollaton Road
Nottingham, NG8 1BB
United Kingdom

Daniel John Zizzo (Contact Author)

BENC and Newcastle University Business School, Newcastle University ( email )

United Kingdom

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