Convertible local currency and trust: `It's Not You, It's Me' - A field experiment in the French Basque Country

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TitreConvertible local currency and trust: `It's Not You, It's Me' - A field experiment in the French Basque Country
Type de publicationJournal Article
Year of Publication2020
AuteursAlia H, Spiegelman E
JournalLOCAL ECONOMY
Volume35
Pagination0269094220905505
Date PublishedMAR
Type of ArticleArticle
ISSN0269-0942
Mots-cléscommunity currency, convertible local currency, Eusko, Field experiment, trust
Résumé

We present a field experiment investigating the mechanism by which community currencies enhance trust. Our question is the following: do I trust more when using a community currency because I am a trusting-type person or because I think that you are trustworthy? We call the former preference-based trust; while the latter is belief-based trust. We apply a modification of the standard trust game from the experimental economics literature to disentangle these mechanisms. Player A has to choose whether or not to trust player B, and player B can either reciprocate that trust or not. Our innovation is in experimentally separating the currency in which the game is played (effective currency), from the currency preferred by the participant (preferred currency). If the mechanism is preference-based, then preferred currency will determine trust more than effective; if it is belief-based, then the effective currency will be determinant. We find strong evidence of the preference-based mechanism of community currencies on trust, and only weak evidence of the belief-based mechanism.

DOI10.1177/0269094220905505