Trust and Trustworthiness in Northeast Asia

Abstract

AbstractThis study examines the levels of trust and trustworthiness in northeast Asia, including the northeast, southeast, and central regions of China as well as South Korea. Trust and trustworthiness were measured using a simulated two-tier supply chain experiment. The retailer obtains a demand forecast and reports a value to the supplier; then the supplier determines the production based on the retailer’s report. The retailer has an incentive to inflate the report to guarantee sufficient production, whereas the supplier is motivated to deflate the retailer’s report to avoid overproduction. Two participants took part in the experiment together every time: one played as a retailer, and one played as a supplier. In total, 160 participants joined the experiment: 40 from Liaoning (northeast China), 40 from Zhejiang (southeast China), 40 from Hubei (central China), and 40 from South Korea. The results showed that trust in Hubei was relatively high among the investigated regions and country, whereas no difference was found in the level of trustworthiness. Additionally, the trust level was steady through the entire cooperation stages. In contrast, the trustworthiness level was lower in the early stage than in the late stage in Liaoning and Hubei but not in Zhejiang and South Korea. Besides, trust and trustworthiness in Hubei were higher than in Liaoning and South Korea in the middle cooperation stage, and trust in Hubei was higher than trust in Zhejiang in the late cooperation stage.KeywordsTrustTrustworthinessChinaSouth KoreaCulture