An Economic Analysis on the Impacts of Inequality on Trust and Trustworthiness: A Laboratory Experiment

An Economic Analysis on the Impacts of Inequality on Trust and Trustworthiness: A Laboratory Experiment

The study investigated the impacts of inequality on an individual’s trust and trustworthiness through a laboratory experiment. The study examined the impacts of wealth information disclosure on the send and return rates of the players. A modified version of Greiner et al.’s trust game (2011) was used in the study. There were two treatment groups in the experiment. Wealth information was disclosed to the matched subjects in the first treatment while there is no disclosure of any information in the second treatment. A two sample t-test with equal variances was used in order to identify significant mean differences between the two treatment groups. Other factors influencing trust and trustworthiness were also identified through the use of Ordinary Least Squares (OLS) regression. Based on the results, there were significant mean differences between the treatment groups which mean that disclosure of wealth information affects and individual’s trust and trustworthiness. Results also suggest that, on the average, men are more trusting than women—for those who played trustors. Meanwhile, trustees with higher wealth standing tend to return more than their counterparts with lower wealth standing. Ultimately, it was also observed that receiving a higher amount of money and a higher wealth-difference between players are significant factors that can decrease the trustworthiness of a player.