Crowding Out Trust: The Adverse Effects of Verification. An Experiment

Through an experiment this study investigates the effects that verification has on honest traders. This paper demonstrates that by reducing the scope for trust verification can have a negative effect on the behaviour of honest individuals. Specifically, the analysis shows that trustworthy agents are willing to punish or seek compensation from those that deprive them of trust opportunities through the use of verification. Regulatory implications are discussed.

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Year of publication:	2002-03-01
Authors:	Guerra, Gerardo A.
Institutions:	Department of Economics, Oxford University
Subject:	verification \| trust \| ultimatum bargaining \| experiments

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Extent:	application/pdf
Series:	Economics Series Working Papers.
Type of publication:	Book / Working Paper
Notes:	Number 98
Classification:	C72 - Noncooperative Games ; C78 - Bargaining Theory; Matching Theory ; C90 - Design of Experiments. General ; D18 - Consumer Protection ; D82 - Asymmetric and Private Information ; L86 - Information and Internet Services; Computer Software
Source:	RePEc - Research Papers in Economics

Persistent link: https://ebvufind01.dmz1.zbw.eu/10010605085