Mateusz

Introduction#

Structure: I would introduce the RQ earlier on in the introduction. Now, it is clear you want to do something with trust after page one, but not necessarily what exactly.

  • Are you also using priming in your research? Otherwise I think it’s better to first state the RQ, and then shortly summarize how other others have attempted to answer similar questions (including experimental approaches, but probably, not only).

Main RQ: Trust in banks $\Rightarrow$ financial decisions?

You have:

  • Macro data: Amount of funds/deposits/deposit size(?)

  • Micro data: Surveys

    • Three different treatments (“neutral”, “anti-capitalist”, “anti-banking”)

As it is difficult to successfully expose the same individual to both versions of the survey due to high likelihood of remembering previous responses and trying to stay consistent in terms of answers given, a wide range of controlling variables such as gender, age, level of general education and experience in finance-related fields (both educational and professional) are applied.

These are points you should raise in methodology. The basic argument behind randomization is that the influence of such systematic factors will be ‘balanced’ out as $N \rightarrow \infty$.

Literature#

Maybe (but also, maybe not) your literature review could benefit from a more abstract contract-theoretical perspective on trust/reputation issues:

  • Baker, G., Gibbons, R., & Murphy, K. J. (1994). Subjective performance measures in optimal incentive contracts. The quarterly journal of economics, 109(4), 1125-1156.

  • This is a very general article detailing how reputation/trust and formal contracts could be substitutes/complements under various circumstances.

  • Benabou, R., & Tirole, J. (2011). Laws and norms (No. w17579). National Bureau of Economic Research.

  • This article describes a model in which effectiveness of laws and institutions is contingent on social norms.

  • Bénabou, R., & Tirole, J. (2016). Mindful economics: The production, consumption, and value of beliefs. Journal of Economic Perspectives, 30(3), 141-64.

This summarizes the theoretical literature about the “value of beliefs” and ideology.

From that abstract perspective, you can go to the (more empirical) trust literature, and afterwards, to the trust and financial decisions literature. Then, your lit. review would have a structural that goes from general to specific, culminating in your own RQ.

The D’Acunto study is reviewed very extensively. Maybe you can try to look for the foundational theories and provide a more balanced review.

Hypotheses#

H1: People with higher level of trust towards banking sector will show more willingness to engage in riskier and long-term investments

H2: Priming with a text that is negatively-loaded in linguistic terms or that mentions some of the controversial topics related to banking will lead to lower level of trust.

  • And therefore also to a lower level of investments? Do you have any ways to find out whether, if you observe a negative relation between priming and lower willingness, that it is in fact due to trust?

H3: If the text refers to negative events related to exchange rate risk, the impact of lowered trust will be particularly pronounced in decisions about investments explicitly depending on exchange rates between PLN and foreign currencies.

Methodology#

  • Structure:

    • Data
      • Survey Details
      • Where did you spread
      • Challenges: possible attrition
    • Variable Definitions
    • Empirical Model

More specifically, it uses the uniqueness of markets of Eastern European countries such as Hungary, Poland etc. in terms of the prevalence of CHF-denominated mortgages.

Interesting, I didn’t know this! (But maybe you should find a short ref. to back this up)

Empirical Model#

  • I think your models should be straightforward. You do have to pay atetntion to Hausman tests, with the help of which you can test whether a set of coefficients from one regression is significantly different from a set of coefficients from another regression (as you have 2 treatment groups, 1 control group).