Beliefs and Trust: An Experiment

CentER Discussion Paper No. 2005-88

24 Pages Posted: 15 Sep 2005

See all articles by Jana Vyrastekova

Jana Vyrastekova

Radboud University Nijmegen - Department of Economics

Supriya Garikipati

University of Liverpool

Date Written: August 2005

Abstract

In this paper, we address the concept of trust by combining (i) the self-reported trust and belief in trustworthiness of others from a general unpaid questionnaire, (ii) choices made in a social valuation task designed to measure subjects' distributional preferences, (iii) strategies submitted in the trust game in both roles of the game, and (iv) subjects' beliefs about the strategies of their co-player submitted in the form of probability distributions and incentivized by the quadratic scoring rule. We show that trust can be expressed as a belief in positive reciprocity of the trustee, and answers to general questionnaire lack predictive power. Distributional preferences also play a role in the decision to trust in that they affect the subjects' beliefs about the positive reciprocity of others. Cooperative subjects are more optimistic in their beliefs and therefore trust more.

Keywords: experimental economics, trust, beliefs, distributional preferences

JEL Classification: C72, C91

Suggested Citation

Vyrastekova, Jana and Garikipati, Supriya, Beliefs and Trust: An Experiment (August 2005). CentER Discussion Paper No. 2005-88, Available at SSRN: https://ssrn.com/abstract=800424 or http://dx.doi.org/10.2139/ssrn.800424

Jana Vyrastekova (Contact Author)

Radboud University Nijmegen - Department of Economics ( email )

Nijmegen, 6500 HK
Netherlands

Supriya Garikipati

University of Liverpool ( email )

Chatham Street
Liverpool, L69 7ZA
United Kingdom

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