Assessing the trustworthiness of others is a ubiquitous and fundamental process. If these trustworthiness assessments translate into trusting behaviour, understanding how ‘trust beliefs’ are formed is consequential. The current US presidential election may hinge on voter assessments of the trustworthiness of candidates. The victims of the US investment fraudster Bernie Madoff are reminders of the potentially severe financial consequences of misallocated trust.
Kenneth Arrow (1972) famously asserted that trust is a prerequisite for most economic activity. A large and lively body of research in economics focuses on trust and its aggregate economic consequences, documenting strong relationships between general levels of trust between nations and everything from GDP growth to cross-country trade patterns (Knack and Zak 2001, Knack and Keefer 1996, Guiso et al. 2004, Tabellini 2008, Algan and Cahuc 2010, Guiso et al. 2009).
Despite the economic importance of trust, surprisingly little is known about what causes us to trust others. Although previous research suggests that both pecuniary and non-pecuniary factors (‘betrayal’ or ‘control’) play a role, it is not clear which non-pecuniary factors are particularly important or persistent, or precisely how these factors affect trust (Bohnet and Zeckhauser 2004, Cox 2004, Ashraf et al. 2006, Bohnet et al. 2008, Butler and Miller 2015, Bolton et al. 2016).
http://www.nakedcapitalism.com/2016/11/whom-to-trust-why-we-persistently-get-it-wrong.html
Kenneth Arrow (1972) famously asserted that trust is a prerequisite for most economic activity. A large and lively body of research in economics focuses on trust and its aggregate economic consequences, documenting strong relationships between general levels of trust between nations and everything from GDP growth to cross-country trade patterns (Knack and Zak 2001, Knack and Keefer 1996, Guiso et al. 2004, Tabellini 2008, Algan and Cahuc 2010, Guiso et al. 2009).
Despite the economic importance of trust, surprisingly little is known about what causes us to trust others. Although previous research suggests that both pecuniary and non-pecuniary factors (‘betrayal’ or ‘control’) play a role, it is not clear which non-pecuniary factors are particularly important or persistent, or precisely how these factors affect trust (Bohnet and Zeckhauser 2004, Cox 2004, Ashraf et al. 2006, Bohnet et al. 2008, Butler and Miller 2015, Bolton et al. 2016).
http://www.nakedcapitalism.com/2016/11/whom-to-trust-why-we-persistently-get-it-wrong.html
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