51茶馆

We examine how relative economic status influences trust and trustworthiness, using a lab-in-the-field experiment with 498 participants in Haryana, India. The economic status is measured using self-reported consumption and asset data. Subjects are randomly assigned to opponents with HIGHER, SAME, or LOWER relative economic status. We find that trustors, with a lower economic status opponents, invest more, but relative economic status does not affect trustworthiness, i.e., the amount returned by the trustee. Furthermore, following Charness and Rabin (2002), we find trustees exhibit a social-welfare preference, i.e., prefer to increase the trustor鈥檚 payoff. In turn, trustors who report trust as the main driver of their decision tend to invest more. We also find weak evidence that trustors with a LOWER economic status opponent are more likely to report trust as the main driver of their decision.