The Dynamic Interplay of Inequality and Trust-An Experimental Study

@inproceedings{Greiner2009TheDI,
  title={The Dynamic Interplay of Inequality and Trust-An Experimental Study},
  author={Ben Greiner and Axel Ockenfels and Peter Werner},
  year={2009}
}
We study the interplay of inequality and trust in a dynamic growth game, in which trust increases efficiency and thus allows higher growth of the laboratory economy in the future. We find that trust is initially high in a treatment starting with equal endowments, but decreases over time. In a treatment with unequal endowments, trust is initially lower yet remains relatively stable. The reason is that, with unequal initial endowments, trust depends less on wealth comparisons. As a result, with… CONTINUE READING
Highly Cited
This paper has 17 citations. REVIEW CITATIONS