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The cultural transmission of trust and trustworthiness

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  • Okada, Akira

Abstract

We consider the cultural transmission of trust and trustworthiness in a trust game with spatial matching. Players are assumed to enjoy psychological benefits from good conduct. The game has a unique equilibrium with different behavioral modes, depending on social distance between players. Parents rationally choose efforts to transmit their own values to their children. Trust and trustworthiness coevolve, and the transmission dynamics has a globally stable stationary point if the increasing rate of educational marginal costs is high. While “local” enforcement applied to transactions between closer partners deteriorates the diffusion of trust and trustworthiness, they are influenced by institutions in different ways. Better “intermediate” enforcement crowds out trust and crowds in trustworthiness.

Suggested Citation

  • Okada, Akira, 2020. "The cultural transmission of trust and trustworthiness," Journal of Economic Behavior & Organization, Elsevier, vol. 169(C), pages 53-69.
  • Handle: RePEc:eee:jeborg:v:169:y:2020:i:c:p:53-69
    DOI: 10.1016/j.jebo.2019.10.025
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    1. Limbach, Peter & Rau, P. Raghavendra & Schürmann, Henrik, 2020. "The Death of Trust Across the U.S. Finance Industry," CFR Working Papers 20-05, University of Cologne, Centre for Financial Research (CFR).

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    More about this item

    Keywords

    Crowding effect; Cultural transmission; Random matching game; Social distance; Trust; Trustworthiness;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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