Trust and Cheating / Jeffrey V. Butler, Paola Giuliano, Luigi Guiso.

By:

Butler, Jeffrey V

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Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w18509.Publication details: Cambridge, Mass. National Bureau of Economic Research 2012.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: When we take a cab we may feel cheated if the driver takes an unnecessarily long route despite the lack of a contract or promise to take the shortest possible path. Is our decision to take the cab affected by our belief that we may end up feeling cheated? Is the behavior of the driver affected by his beliefs about what we consider cheating? We address these questions in the context of a trust game by asking participants directly about their notions of cheating. We find that: i) both parties to a trust exchange have implicit notions of what constitutes cheating even in a context without promises or messages; ii) these notions are not unique - the vast majority of senders would feel cheated by a negative return on their trust/investment, whereas a sizable minority defines cheating according to an equal split rule; iii) these implicit notions affect the behavior of both sides to the exchange in terms of whether to trust or cheat and to what extent. Finally, we show that individual's notions of what constitutes cheating can be traced back to two classes of values instilled by parents: cooperative and competitive. The first class of values tends to soften the notion while the other tightens it.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
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Previous	nber w18506 The Role of Technological Change in Green Growth /	nber w18507 Understanding the Long-Run Decline in Interstate Migration /	nber w18508 Estimates of the Trade and Welfare Effects of NAFTA /	nber w18509 Trust and Cheating /	nber w1851 Survey Evidence on Diffusion of Investment Among Institutional Investors /	nber w18510 LEADS on Macroeconomic Risks to and from the Household Sector /	nber w18511 Do Women Avoid Salary Negotiations? Evidence from a Large Scale Natural Field Experiment /	Next

November 2012.

When we take a cab we may feel cheated if the driver takes an unnecessarily long route despite the lack of a contract or promise to take the shortest possible path. Is our decision to take the cab affected by our belief that we may end up feeling cheated? Is the behavior of the driver affected by his beliefs about what we consider cheating? We address these questions in the context of a trust game by asking participants directly about their notions of cheating. We find that: i) both parties to a trust exchange have implicit notions of what constitutes cheating even in a context without promises or messages; ii) these notions are not unique - the vast majority of senders would feel cheated by a negative return on their trust/investment, whereas a sizable minority defines cheating according to an equal split rule; iii) these implicit notions affect the behavior of both sides to the exchange in terms of whether to trust or cheat and to what extent. Finally, we show that individual's notions of what constitutes cheating can be traced back to two classes of values instilled by parents: cooperative and competitive. The first class of values tends to soften the notion while the other tightens it.