The elasticity of trust in the Middle East

From a new experimental paper, by Iris Bohnet, Benedikt Hermann, Mohamad Al-Ississ, Andrea Robbett (she is speaking at GMU today), Khalid Al-Yahi, and Richard Zeckauser, here is one bit from the conclusion:

Mechanisms aimed at mitigating the cost of betrayal, such as damages or insurance provision, seem to work better in the United States, and arrangements focusing on preventing the occurrence of betrayal, such as a punishment threat, have greater impact in the Arab Middle East. In our experiments, trust was promoted by decreasing the cost of betrayal in the United States but not in Jordan. Punishment functioned differently. Giving the first mover the option to take revenge at a price should she be betrayed enhanced trust in Saudi Arabia but not in the United States.


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