Trustworthiness in the Financial Industry

79 Pages Posted: 25 Aug 2020

See all articles by Andrej Gill

Andrej Gill

Johannes Gutenberg University Mainz

Heiner Schumacher

KU Leuven

Matthias Heinz

University of Cologne; Centre for Economic Policy Research (CEPR)

Matthias Sutter

Max Planck Institute for Research on Collective Goods

Multiple version iconThere are 4 versions of this paper

Date Written: 2020

Abstract

The financial industry has been struggling with widespread misconduct and public mistrust. Here we argue that the lack of trust into the financial industry may stem from the selection of subjects with little, if any, trustworthiness into the financial industry. We identify the social preferences of business and economics students, and follow up on their first job placements. We find that during college, students who want to start their career in the financial industry are substantially less trustworthy. Most importantly, actual job placements several years later confirm this association. The job market in the financial industry does not screen out less trustworthy subjects. If anything the opposite seems to be the case: Even among students who are highly motivated to work in finance after graduation, those who actually start their career in finance are significantly less trustworthy than those who work elsewhere.

Keywords: trustworthiness, financial industry, selection, social preferences, experiment

JEL Classification: C910, G200, M510

Suggested Citation

Gill, Andrej and Schumacher, Heiner and Heinz, Matthias and Sutter, Matthias, Trustworthiness in the Financial Industry (2020). CESifo Working Paper No. 8501, Available at SSRN: https://ssrn.com/abstract=3680358

Andrej Gill (Contact Author)

Johannes Gutenberg University Mainz ( email )

Saarstr. 21
Jakob Welder-Weg 4
Mainz, 55122
Germany

Heiner Schumacher

KU Leuven ( email )

Oude Markt 13
Leuven, Vlaams-Brabant 3000
Belgium

Matthias Heinz

University of Cologne ( email )

Albertus-Magnus-Platz
Cologne, 50923
Germany

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Matthias Sutter

Max Planck Institute for Research on Collective Goods ( email )

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany

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