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A trust game in loss domain

Published online by Cambridge University Press:  14 March 2025

Ola Kvaløy ,
Miguel Luzuriaga  and
Trond E. Olsen
Ola Kvaløy*
Affiliation:
University of Stavanger, Stavanger, Norway
Miguel Luzuriaga*
Affiliation:
Neu-Ulm University of Applied Sciences, Neu-Ulm, Germany
Trond E. Olsen*
Affiliation:
Norwegian School of Economics, Bergen, Norway
*
ola.kvaloy@uis.no
miguel.luzuriaga@hs-neu-ulm.de
trond.olsen@nhh.no
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Abstract

In standard trust games, no trust is the default, and trust generates a potential gain. We investigate a reframed trust game in which full trust is default and where no trust generates a loss. We find significantly lower levels of trust and trustworthiness in the loss domain when full trust is default than in the gain domain when no trust is default. As a consequence, trust is on average profitable in the gain domain, but not in the loss domain. We also find that subjects respond more positively to higher trust in the loss domain than in the gain domain.

Keywords

TrustReciprocityFramingDefaultsReference pointsExperiment

JEL classification

C91: Laboratory, Individual Behavior C72: Noncooperative Games

Information

Type
Original Paper
Information
Experimental Economics , Volume 20 , Issue 4 , December 2017 , pp. 860 - 877
Copyright
Copyright © 2017 Economic Science Association

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Footnotes

Electronic supplementary material The online version of this article (doi:https://doi.org/10.1007/s10683-017-9514-7) contains supplementary material, which is available to authorized users.

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