Can Observers Predict Trustworthiness?

36 Pages Posted: 20 Oct 2008

See all articles by Michèle Belot

Michèle Belot

University of Oxford - Nuffield Department of Medicine

V. Bhaskar

University College London

Jeroen van de Ven

University of Amsterdam; Tinbergen Institute

Date Written: August 5, 2008

Abstract

We analyze experimental evidence on whether untrained subjects can predict how trustworthy an individual is. Two players on a TV show play a high stakes prisoner's dilemma with pre-play communication. Our subjects report probabilistic beliefs that each player cooperates, before and after communication. Subjects correctly predict that women, and players who voluntarily promise that they will cooperate, are more likely to cooperate. They are also able to distinguish truth from lies when a player is asked about his or her intentions by the host. In consequence, and in contrast with the psychology literature, our naive subjects are able to distinguish defectors from cooperators, with the latter inducing beliefs that are 7 percentage points higher. We also study Bayesian updating in the natural and complex context, and find mean reversion in beliefs, and reject the martingale property.

Keywords: trust, promises, Bayesian updating, detecting deception, martingale property of beliefs

JEL Classification: C72, C93, D64, D83

Suggested Citation

Belot, Michèle V. K. and Bhaskar, V. and van de Ven, Jeroen, Can Observers Predict Trustworthiness? (August 5, 2008). Available at SSRN: https://ssrn.com/abstract=1286023 or http://dx.doi.org/10.2139/ssrn.1286023

Michèle V. K. Belot

University of Oxford - Nuffield Department of Medicine ( email )

New Road
Oxford, OX1 1NF
United Kingdom

V. Bhaskar

University College London ( email )

Gower Street
London
United Kingdom

Jeroen Van de Ven (Contact Author)

University of Amsterdam ( email )

Spui 21
Amsterdam, 1018 WB
Netherlands

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

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