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"Trust, Beliefs and Cooperation: Excavating a Foundation of Strong Economics

Jeongbin Kim, Louis Putterman () and Xinyi Zhang

No 2019-10, Working Papers from Brown University, Department of Economics

Abstract: We use a two-phase experimental design to study how systematically manipulated beliefs about trust and trustworthiness can promote or deter cooperation. We use decisions in an initially played trust game to create five environments that differ in the information subjects have about the relative trust/trustworthiness of fellow group members when they make a voluntary contribution decision in our experiment’s second phase. We find that perceived high trusting environments are treated equivalently to ones of perceived high trustworthiness, with both positively affecting subjects’ first-order beliefs about the cooperativeness of group-mates, and in consequence, leading to higher contributions. Our results indicate that people cooperate more and hence produce more together in an environment of high trust/trustworthiness, indicating one channel through which trust helps to grow the economic pie.

New Economics Papers: this item is included in nep-cbe, nep-cdm, nep-exp, nep-gth and nep-soc
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:bro:econwp:2019-10

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