- Law, Informal Institutions and Trust: an Experimental Perspective
- Sun, Huojun <1983>
Subject
- SECS-P/06 Economia applicata
Description
- This dissertation has studied how legal and non-legal mechanisms affect the levels of trust and trustworthiness in an economy, and whether and when subtle psychological factors are crucial for establishing trust and even for recovering trust from a breach of contract. The first Chapter has addressed the question of whether formal legal enforcement crowds out or crowds in the amount of trust in a society. We find that formal legal mechanisms, especially formal contracts backed by a powerful authority, normally undermine trust except when they are perceived as legitimate, or when there are no strong social norms of fairness (i.e. the population in a society is considerably heterogeneous), or when the environment in which repeated commercial relationships take place becomes highly uncertain. The second Chapter has examined whether the endogenous adoption of a collective punishment institution can help a society coordinate on an efficient outcome, characterized by high levels of trust and trustworthiness. The experimental results show that the endogenous introduction of collective punishment by means of a majority-voting rule does not significantly improve coordination on the efficient equilibrium. Not all subjects seem to be able to anticipate the change in behavior induced by the introduction of the mechanism, and a majority of them vote against it. The third Chapter has explored whether high-trustors adapt their behavior in response to others’ trustworthiness or untrustworthiness more quickly, which in turn supports them to maintain higher default expectations of others’ trustworthiness relative to low-trustors. Our experimental results reveal that high-trustors are better than low-trustors at predicting others’ trustworthiness because they are less susceptible to the anticipated aversive emotions aroused by the potential betrayal and thereby have a higher willingness to acquire the valuable information about their partner’s actions.
Date
- 2015-12-14
Type
- Doctoral Thesis
- PeerReviewed
Format
- application/pdf
Identifier
urn:nbn:it:unibo-15708
Sun, Huojun (2015) Law, Informal Institutions and Trust: an Experimental Perspective, [Dissertation thesis], Alma Mater Studiorum Università di Bologna. Dottorato di ricerca in European doctorate in law and economics