Trust and Cheating. (12th January 2016)

• Record Type: Journal Article
• Authors: Butler, Jeff; Giuliano, Paola; Guiso, Luigi
• Is Part Of: Economic journal. Volume 126:Number 595(2016)
• Page Start: 1703
• Page End: 1738
• Publication Date: 2016-01-12
• Subjects: Economics -- Periodicals; Économie politique -- Périodiques; 330.05
• DOI: 10.1111/ecoj.12271
• Languages: English
• ISSNs: 0013-0133

Abstract

Abstract : When we take a taxi we may feel cheated if the driver takes an unnecessarily long route despite the lack of a contract to take the shortest possible path. Is the behaviour of the driver affected by beliefs about our cheating notions? We address this question in the context of a trust game. We find that both parties to a trust exchange have personal notions of cheating and that these notions have a bimodal distribution. We conceptualise cheating notions as moral expectations, which provide a micro‐foundation for guilt. Cheating notions substantially affect decisions on both sides of the trust exchange.