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Faculty Research Working Paper Series
Iris Bohnet
Roy E. Larsen Professor of Public Policy
phone: (617)495-5605
The Elasticity of Trust: Evidence from Kuwait, Oman, Switzerland, the United Arab Emirates and the United States.
Bohnet, Iris, Benedikt Herrmann, and Richard Zeckhauser. "The Elasticity of Trust: Evidence from Kuwait, Oman, Switzerland, the United Arab Emirates and the United States." KSG Faculty Research Working Paper Series RWP05-046, July 2005.
Abstract
This paper employs experiments to determine how effectively arrangements decreasing the expected cost of trust betrayal foster trust in three Gulf countries (Kuwait, Oman and the United Arab Emirates), and two Western countries (Switzerland and the United States). Our basic instrument elicits subjects' minimum acceptable probabilities for trustworthiness that would make them just willing to trust. Trust proves more elastic to the likelihood and the cost of betrayal in the West than in the Gulf. Risk aversion and betrayal aversion contribute to this difference. The disparities between the West and the Gulf are driven more by men than by women.
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