Deciding to Distrust

35 Pages Posted: 9 Feb 2006

See all articles by Iris Bohnet

Iris Bohnet

Harvard University - Harvard Kennedy School (HKS)

Stephan Meier

Federal Reserve Bank of Boston; IZA Institute of Labor Economics; Columbia Business School - Management

Date Written: October 25, 2005

Abstract

We employ experiments to illustrate one factor contributing to the lack of distrust in the recent corporate scandals: Trust rather than no trust was the default. Holding the expected returns from trusting constant, people are more trusting when the default is trust than when it is no trust. In a new game, the Distrust Game (DTG), where the default is full trust, trust levels are higher and trustworthiness levels lower than in the BDM-Trust Game (TG), where the default is no trust. Agents punish distrust more in the DTG than in the TG but principals do not anticipate this.

Keywords: Trust, reciprocity, framing, experiments, Economics - Microeconomics, Leadership/Conflict Management

JEL Classification: C72, C91

Suggested Citation

Bohnet, Iris and Meier, Stephan, Deciding to Distrust (October 25, 2005). KSG Working Paper No. RWP05-049; FRB Boston Working Paper No. 05-4. Available at SSRN: https://ssrn.com/abstract=839225 or http://dx.doi.org/10.2139/ssrn.839225

Iris Bohnet (Contact Author)

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States
617-495-5605 (Phone)
617-496-5747 (Fax)

Stephan Meier

Federal Reserve Bank of Boston ( email )

600 Atlantic Avenue
Boston, MA 02210
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Columbia Business School - Management ( email )

3022 Broadway
New York, NY 10027
United States

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