Trust, Values and False Consensus
AbstractTrust 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. Mis-calibrated beliefs lower participants' experimental trust game earnings by about 20 percent on average.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6916.
Length: 29 pages
Date of creation: Oct 2012
Date of revision:
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Other versions of this item:
- Jeffrey Butler & Paola Giuliano & Luigi Guiso, 2012. "Trust, Values and False Consensus," EIEF Working Papers Series 1210, Einaudi Institute for Economics and Finance (EIEF), revised Oct 2012.
- Butler, Jeff & Giuliano, Paola & Guiso, Luigi, 2012. "Trust, Values and False Consensus," CEPR Discussion Papers 9216, C.E.P.R. Discussion Papers.
- Jeffrey Butler & Paola Giuliano & Luigi Guiso, 2012. "Trust, Values and False Consensus," NBER Working Papers 18460, National Bureau of Economic Research, Inc.
- A1 - General Economics and Teaching - - General Economics
- A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
- D1 - Microeconomics - - Household Behavior
- Z1 - Other Special Topics - - Cultural Economics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-10-27 (All new papers)
- NEP-EVO-2012-10-27 (Evolutionary Economics)
- NEP-HPE-2012-10-27 (History & Philosophy of Economics)
- NEP-SOC-2012-10-27 (Social Norms & Social Capital)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
- Berggren, Niclas & Nilsson, Therese, 2014. "Globalization and the Transmission of Social Values: The Case of Tolerance," Working Paper Series 1007, Research Institute of Industrial Economics.
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