The Effects of Regulation on the Establishment of Trust

Van Swol, Lyn Mary

Permalink

https://hdl.handle.net/2142/82258 Copy

Description

Title

The Effects of Regulation on the Establishment of Trust

Author(s)

Van Swol, Lyn Mary

Issue Date

1998

Doctoral Committee Chair(s)

Sniezek, Janet A.

Department of Study

Psychology

Discipline

Psychology

Degree Granting Institution

University of Illinois at Urbana-Champaign

Degree Name

Ph.D.

Degree Level

Dissertation

Keyword(s)

Economics, Theory

Language

eng

Abstract

Regulation was hypothesized to reduce the importance of trust within an interaction and prevent trust from being established. Buyers and Sellers traded goods in either a condition of complete regulation or no regulation. In the no regulation condition, Sellers could sell different quality goods than they had advertised, although Buyers found out after each trading session what they had actually bought. In the regulation condition, Sellers were regulated and always had to sell the same quality good they were advertising. In study 1, a new Buyer and Seller were brought into the trading for both conditions after 12 trading sessions. In study 2, after 12 trading sessions, participants in both the previously regulated and previously unregulated condition could pay a cost before buying the good to check if a Seller's offer was truthful. Therefore, in study 2 after 12 trading sessions, Sellers in the regulation condition were no longer automatically regulated on every trade. Trust and partners' reputation were more important to the vulnerable partner (the Buyer), especially when there was no regulation. Buyers in the no regulation condition in study one and all Buyers in study two had more extreme trust ratings in the Sellers than Sellers had in the Buyers, rating some Sellers high on trust and some Sellers low on trust. Sellers' use of deception was positively related to Buyers' trust in the Sellers. In study one, the new Buyer brought into the exchange was deceived more and the new Seller used more deception. However, there was no difference between conditions for Buyers' trust in the new Seller or between the new Buyers' trust in the Sellers. In study two, the previously regulated Sellers used more deception than did previously unregulated Sellers. However, participants in both conditions did not differ in their likelihood of checking the Sellers' offers. Overall, without regulation Buyers developed both more trust and distrust than Buyers with regulation, having more discrimination in their trust ratings of the Sellers.

Graduation Semester

1998

Type of Resource

text

Permalink

http://hdl.handle.net/2142/82258

Owning Collections