transmission tends to be biased toward excessively conservative priors. As a result, societies can be trapped in a low-trust … equilibrium. In this context, a temporary shock to the return to trusting can have a permanent effect on the level of trust. We …

A vast literature has investigated the relationship between trust and aggregate economic performance. We investigate … the relationship between individual trust and individual economic performance. We find that individual income is hump …-shaped in a measure of intensity of trust beliefs available in the European Social Survey. We show that heterogeneity of trust …

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 …

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 …

How much do cultural biases affect economic exchange? We try to answer this question by using the relative trust … European citizens have for citizens of other countries. First, we document that this trust is affected not only by objective … similarities. We then find that lower relative levels of trust toward citizens of a country lead to less trade with that country …

This paper aims to show that culture is an important determinant of the effectiveness of formal democratic institutions … electoral reforms in Chinese villages. We use the presence of village temples to proxy for culture, or more specifically, for …

In this paper we characterize a situation in which non-calculative trust has to play a role in the decision to …

driven by trust. With flexible prices, we observe low prices and high quality in competitive (oligopolistic) markets, and …