Trust is a key factor for the well-functioning of labor markets. We experimentally study the behavior of staff at competing employment agencies who serve as matchmakers between labor supply and demand. Employment agents can collaborate by sharing vacancies and job seekers at the risk of the...

We analyze the impact of trust on bargaining behavior between auditor and auditee in a tax setting. We study the effect of interpersonal trust and trust in government on both taxpayer and tax auditor. In an experiment with variation in pairwise trust settings, we find evidence that both kinds of...

We study a class of trust dilemmas with symmetric players that evolve in real-time. In these games, as long as all the n players continue to cooperate, the payoff function increases exponentially over time. Simultaneously, however, the temptation to defect also increases at the same rate. The...

Social life offers innumerable instances in which trust relations involve multiple agents. In an experiment, we study a new setting called Collective Trust Game where there are multiple trustees, who may have an incentive to coordinate their actions. Trustworthiness has also a strategic...

Entrepreneurs may differentiate their ventures and attract investments by advertising that their firm produces positive externalities for society. Such signaling of entrepreneurs' trustworthiness may be a prevalent practice in these “impact investment'' opportunities. This paper investigates...

How do corruption outcomes, such as the embezzlement of public funds, depend on the method by which public decision makers are selected? Through an experiment with 472 groups of citizens in Burkina Faso, this paper compares elected and randomly appointed leaders along three dimensions: The...

Several previous studies measure the extent to which individuals trust other individuals and argue that individual trust is an important element of interaction in organizations and markets. However, a related topic is the extent to which it is possible for individuals to trust groups as separate...

We study the existence of homophily (i.e. the tendency for people to make friends with people who are similar to themselves) with respect to trustworthiness. We ask whether two friends show similarly trustworthy behavior towards strangers, and whether this is anticipated by outsiders. We develop...

Customer markets are characterized by long-term relations between buyers and sellers. Long-term relations evolve if buyers trust sellers to provide high quality and if sellers are trustworthy. However, changes in the terms of this implicit contract may antagonize customers and disrupt the...