The Elasticity of Trust: Evidence from Kuwait, Oman, Switzerland, the United Arab Emirates and the United States

Posted: 9 Aug 2005

See all articles by Iris Bohnet

Iris Bohnet

Harvard University - Harvard Kennedy School (HKS)

Benedikt Herrmann

University of Nottingham - School of Economics

Richard J. Zeckhauser

Harvard University - Harvard Kennedy School (HKS); National Bureau of Economic Research (NBER)

Date Written: 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.

Keywords: Economics, Microeconomics, Leadership, Conflict Management, Trust, betrayal aversion, gender differences, in-group preferences

Suggested Citation

Bohnet, Iris and Herrmann, Benedikt and Zeckhauser, Richard J., The Elasticity of Trust: Evidence from Kuwait, Oman, Switzerland, the United Arab Emirates and the United States (July 2005). KSG Working Paper No. RWP05-046, Available at SSRN: https://ssrn.com/abstract=779484

Iris Bohnet (Contact Author)

Harvard University - Harvard Kennedy School (HKS) ( email )

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Benedikt Herrmann

University of Nottingham - School of Economics ( email )

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Richard J. Zeckhauser

Harvard University - Harvard Kennedy School (HKS) ( email )

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National Bureau of Economic Research (NBER) ( email )

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