Social Distance, Beliefs, Norms, and Cognitive Precision in Trust Games: Evidence from a Field Experiment

We study how trust and trustworthiness respond to social distance and how beliefs, norms, and cognitive precision shape social exchange in a field experiment with irrigation farmers. Using a standard trust game with within-subject variation in social-distance framing, we distinguish interactions with an anonymous partner from the same irrigation block from interactions with a partner from another scheme within the same district. In addition to trust and reciprocal behavior, we elicit beliefs about expected returns, stated moral obligations to reciprocate, risk preferences, and decision precision measured through consistency in multiple price list choices. The results reveal a clear asymmetry between trust and trustworthiness. Changes in trust across social-distance framings are primarily driven by changes in beliefs, whereas trustworthiness is more strongly associated with normative commitments and exhibits greater behavioral stability across contexts. Cognitive precision is positively related to baseline levels of trust but is associated with smaller framing-induced changes in trustworthiness, consistent with an interpretation of precision as stabilizing behavior rather than uniformly increasing prosociality. Risk preferences play a limited role once beliefs are taken into account. By separating trust from trustworthiness and by distinguishing between behavioral levels and framing-induced changes, the paper provides new field evidence on the mechanisms underlying social exchange. The findings highlight the importance of beliefs for trusting behavior, norms for reciprocal behavior, and decision precision for the consistency of social decisions across contexts.