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Title:The Effects of Regulation on the Establishment of Trust
Author(s):Van Swol, Lyn Mary
Doctoral Committee Chair(s):Sniezek, Janet A.
Department / Program:Psychology
Degree Granting Institution:University of Illinois at Urbana-Champaign
Subject(s):Economics, Theory
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.
Issue Date:1998
Description:99 p.
Thesis (Ph.D.)--University of Illinois at Urbana-Champaign, 1998.
Other Identifier(s):(MiAaPQ)AAI9912405
Date Available in IDEALS:2015-09-25
Date Deposited:1998

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