Trust, Values and False Consensus

Jeffrey Butler, Paola Giuliano and Luigi Guiso

No 1210, EIEF Working Papers Series from Einaudi Institute for Economics and Finance (EIEF)

Abstract: Trust beliefs are heterogeneous across individuals and, at the same time, persistent across generations. We investigate one mechanism yielding these dual patterns: false consensus. In the context of a trust game experiment, we show that individuals extrapolate from their own type when forming trust beliefs about the same pool of potential partners - i.e., more (less) trustworthy individuals form more optimistic (pessimistic) trust beliefs - and that this tendency continues to color trust beliefs after several rounds of game-play. Moreover, we show that one’s own type/trustworthiness can be traced back to the values parents transmit to their children during their upbringing. In a second closely-related experiment, we show the economic impact of mis-calibrated trust beliefs stemming from false consensus. Miscalibrated beliefs lower participants’ experimental trust game earnings by about 20 percent on average.

Pages: 27 pages
Date: 2012, Revised 2012-10
New Economics Papers: this item is included in nep-exp and nep-gth
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Citations: View citations in EconPapers (4)

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Related works:
Journal Article: TRUST, VALUES, AND FALSE CONSENSUS (2015)
Working Paper: Trust, Values and False Consensus (2012)
Working Paper: Trust, Values and False Consensus (2012)
Working Paper: Trust, Values and False Consensus (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:eie:wpaper:1210

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