Trust, Beliefs and Cooperation: Excavating a Foundation of Strong Economies

78 Pages Posted: 26 Sep 2019

See all articles by Jeongbin Kim

Jeongbin Kim

California Institute of Technology

Louis Putterman

Brown University

Xinyi Zhang

Brown University, Students

Date Written: September 24, 2019

Abstract

We use a two-phase experimental design to study how systematically manipulated beliefs about trust and trustworthiness can promote or deter cooperation. We use decisions in an initially played trust game to create five environments that differ in the information subjects have about the relative trust/trustworthiness of fellow group members when they make a voluntary contribution decision in our experiment’s second phase. We find that perceived high trusting environments are treated equivalently to ones of perceived high trustworthiness, with both positively affecting subjects’ first-order beliefs about the cooperativeness of group-mates, and in consequence, leading to higher contributions. Our results indicate that people cooperate more and hence produce more together in an environment of high trust/trustworthiness, indicating one channel through which trust helps to grow the economic pie.

Keywords: trust, cooperation, beliefs, reciprocity, economic growth

JEL Classification: D01, C91, C92, H41

Suggested Citation

Kim, Jeongbin and Putterman, Louis and Zhang, Xinyi, Trust, Beliefs and Cooperation: Excavating a Foundation of Strong Economies (September 24, 2019). Available at SSRN: https://ssrn.com/abstract=3459045 or http://dx.doi.org/10.2139/ssrn.3459045

Jeongbin Kim (Contact Author)

California Institute of Technology

Pasadena, CA 91125
United States

Louis Putterman

Brown University ( email )

Box 1860
Providence, RI 02912
United States

Xinyi Zhang

Brown University, Students ( email )

Providence, RI 02912
United States

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