Abstract
We report data from laboratory experiments where participants were primed using phrases related to markets and trade. Participants then participated in trust games with anonymous strangers. The decisions of primed participants are compared to those of a control group. We find evidence that priming for market participation affects positively the beliefs regarding the trustworthiness of anonymous strangers and increases trusting decisions.
Highlights
We report data from a laboratory experiment that suggests participation in markets causes trusting behavior to increase
Perceptions of trustworthiness do have an indirect effect on efficiency via their effect on the likelihood of trust, which is captured by the subgame perfect Nash equilibrium (SPNE) argument
We find evidence that priming markets leaves people more optimistic about the trustworthiness of anonymous strangers and increases trusting decisions and, in turn, social efficiency
Summary
We report data from a laboratory experiment that suggests participation in markets causes trusting behavior to increase. The positive effects of trust on economic growth have been well documented [2,3,4,5], while the effect of formal institutions–including markets–on trust has generated less consistent findings. In his investigation of the effect of markets and competitiveness on morality, Chen [6] highlights the diverse views in the literature: on the one hand, commerce leads to more gentle manners [7], it cordializes mankind [8], and enhances man’s virtues [9,10,11]. Conditional on a certain level of trust, variation in trustworthiness has no impact upon efficiency
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