capital and trust (Banfield (1958), Putnam (1993)) across different parts of Italy, using microeconomic data on households and … firms. In areas of the country with high levels of social trust, households invest less in cash and more in stock, use more … more access to credit and are more likely to have multiple shareholders. The effect of trust is stronger where legal …

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 …