Online markets and trust

Markets may shape trust and trustworthiness. In this paper, we first report results from a one-shot trust game conducted in a lab-in-the-field experiment with villagers in a rural county in northern China. Experimental results suggest that the experience as online mar-ket sellers improves individuals' level of trustworthiness. To provide more rigorous causal evidence and insights on the underlying mechanisms, we then conducted a laboratory ex-periment, in which subjects played an infinitely repeated market game with asymmet-ric information; both before and after the market game, subjects made choices in a one-shot trust game. We do not find that the ex-post choices in the trust game differ between those playing the market game and those conducting a real-effort task instead, except that when the market game does not have a reputation system, buyers become less trustwor-thy afterward-adding a voluntary reputation system similar to the real-world online rating system help mitigate such a detrimental effect.(c) 2022 Elsevier B.V. All rights reserved.