Investigating the mechanisms underlying trust and reciprocity in economic interactions

About the Project

In the pervasive presence of incomplete contracts, a substantial degree of trust is necessary for the facilitation of a wide range of economic activities. In organizational settings, trust reduces the necessity for costly monitoring activities. Being trusted can also affect an agent's motivation to work and can be inferred by agents depending on the incentive structures in place, the wages of one's peers or the kinds of tasks that are allocated to them (Akerlof, 1982; Cohn et al., 2014, Abraham and Krcal. 2024). However, further research is required to uncover the precise mechanisms at play.

In this context, we ask the following question:

1. Which incentive structure and/or leadership styles in firms convey trust in employees and which ones inadvertently foster mistrust and lead to a loss of efficiency?
2. How does the willingness to trust one's peers, subordinates or leaders depend on norms, culture and/or other features of the work environement?

Exploring the answers to these questions would provide valuable insights for organizations. We invite proposals that demonstrate an interest in employing laboratory and/or field experiments to study the causal relationships between the variables of interest. The proposed research should be grounded in game theoretic principles and aim to incorporate recent findings from behavioral and experimental economics (see for e.g DellaVigna et al., 2022; Engler et al., 2018; Isoni et al., 2023). Please Note: This is not a funded project. Potential applicants should be self-funded or be willing to apply for external funding. The supervisors are happy to help promising candidates develop a high quality SEDARC (https://www.sedarc.ac.uk/) application, though please be aware that it is highly competitive and funding is not guaranteed.

Eligibility requirements: Masters in economics/psychology/mathematics/business administration (applicants with other backgrounds who have a strong interest in the topic are welcome to apply)