The Elasticity of Trust: Evidence from Kuwait, Oman, Switzerland, the United Arab Emirates and the United States
Posted: 9 Aug 2005
Date Written: July 2005
This paper employs experiments to determine how effectively arrangements decreasing the expected cost of trust betrayal foster trust in three Gulf countries (Kuwait, Oman and the United Arab Emirates), and two Western countries (Switzerland and the United States). Our basic instrument elicits subjects' minimum acceptable probabilities for trustworthiness that would make them just willing to trust. Trust proves more elastic to the likelihood and the cost of betrayal in the West than in the Gulf. Risk aversion and betrayal aversion contribute to this difference. The disparities between the West and the Gulf are driven more by men than by women.
Keywords: Economics, Microeconomics, Leadership, Conflict Management, Trust, betrayal aversion, gender differences, in-group preferences
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