Trust, Values and False Consensus

Jeffrey Butler, Paola Giuliano, Luigi Guiso

NBER Working Paper No. 18460
Issued in October 2012
NBER Program(s):   POL

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.

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Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w18460

Published: TRUST, VALUES, AND FALSE CONSENSUS Jeffrey V. Butler1, Paola Giuliano2 andLuigi Guiso3,† Article first published online: 30 JUL 2015 DOI: 10.1111/iere.12125 International Economic Review Volume 56, Issue 3, pages 889–915, August 2015

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