Year: 2012
Type: report
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.
DOI: 10.3386/w18460
Authors: Jeffrey Butler, Paola Giuliano, Luigi Guiso
Institutions: University of Siena, National Bureau of Economic Research, Einaudi Institute for Economics and Finance, University of San Diego, Universitat Pompeu Fabra, University of Mannheim, University of California San Diego, University of California, Davis, London School of Economics and Political Science, Stanford University, University of California, Los Angeles
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W3023463322