On the Economics and Biology of Trust

By Ernst Fehr. Social Science Research Network, 2009

666 citations recorded by the source corpus.

In recent years, many social scientists have claimed that trust plays an important role in economic and social transactions. Despite its proposed importance, the measurement and the definition of trust seem to be not fully settled, and the identification of the exact role of trust in economic interactions has proven to be elusive. It is still not clear whether trust is just an epiphenomenon of good institutions or whether it plays an independent causal role capable of shaping important aggregate economic outcomes. In this paper, I rely on a behavioral definition of trust that enables us to relate it to economic primitives such as preferences and beliefs. I review strong biological and behavioral evidence indicating that trusting is not just a special case of risk-taking, but based on important forms of social preferences such as betrayal aversion. Behaviorally defined trust also opens the door for understanding national and ethnic trust differences in terms of differences in preferences and beliefs, and it suggests ways to examine and interpret a causal role of trust.

Subfields: Demography, Safety Research, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/f0f1f068ce41145cf6e735be9be8dd46acff7107

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Citations in the corpus

Civic Capital as the Missing Link (2010, methodology): “Perhaps, a more serious objection raised against questions of the sort asked in the WVS is that they may be poor measures of trust beliefs and rather reflect some combination of beliefs about others trustworthiness (what we would like to be picking up) and individual preferences—a point forcefully m”
Charitable Giving as a Signal of Trustworthiness: Disentangling the Signaling Benefits of Altruistic Acts (2013, background): “This assumption has been criticized on the grounds that the two games may put subjects in different mental frames (Fehr, 2009).”
Measuring Individual Risk Attitudes in the Lab: Task or Ask? An Empirical Comparison (2015, neutral): “(4)The Big Five personality measure is also used, for example, by Bartling, Fehr, Marechal and Schunk (2005) who provide evidence that Agreeableness is related to a person’s competitiveness.”
The Biology of Trust: Integrating Evidence From Genetics, Endocrinology, and Functional Brain Imaging (2012, background): “…if trust is conceptualized as a behavior, it could be more advantageous to measure actual behavior (e.g., cooperative behavior) in a trust situation (e.g., in an economic game) rather than by asking people about their beliefs, attitudes, or intentions in a hypothetical trust setting (Fehr, 2009a).”
Distinguishing trust from risk: An anatomy of the investment game (2010, background): “Fehr et al. (2002), in contrast, find that survey-based measures of trust are indeed correlated with the sender’s behavior in a trust game.”
The Relationship between Economic Preferences and Psychological Personality Measures (2012, background): “Finally, trust describes an individual’s belief about others’ trustworthiness combined with a preference to take social risks (e.g. Fehr, 2009).”
Culture: persistence and evolution (2014, neutral): “2 See Gruber and Hungerman (2008), Alesina and Fuchs-Schuendeln (2007), Tella et al. (2007), Giuliano and Spilimbergo (2014), Fernandez (2011), Fehr (2009), and Bowles (1998).”
The Empire is Dead, Long Live the Empire! Long-Run Persistence of Trust and Corruption in the Bureaucracy (2016, neutral): “Given this formulation, the response may be “not only shaped by people’s beliefs about others’ trustworthiness, but also by their own preferences towards taking social risks” (Fehr 2009, p. 239).”
Trust: An Integrative Review from a Person–Situation Perspective (2015, methodology): “(Baier, 1986; Bohnet & Zeckhauser, 2004; J. Dunn, 1988; Dunning & Fetchenhauer, 2010, 2011; Evans & Krueger, 2011; Fehr, 2009; Hong & Bohnet, 2007; Malhotra, 2004; Mayer et al., 1995; Ross & LaCroix, 1996; Rousseau et al., 1998; Zand, 1972) Betrayal sensitivity Individuals might differ in their weig”
PEER EFFECTS IN ECONOMIC ATTITUDES (2014, neutral): “Though recent research shows that risk aversion and trust are unique attitudes (Eckel and Wilson 2004; Fehr 2009; Houser, Schunk, and Winter 2010), we also control for contemporaneous correlations between an individual’s trust and risk aversion.”
Growing to Trust (2015, background): “, Li & Fung, 2013; Poulin & Silver, 2008), while others report U-shaped (Fehr, 2009) or even negative associations (Fehr, Fischbacher, Von Rosenbladt, Schupp, & Wagner, 2003).”
Trust, Growth and Well-Being: New Evidence and Policy Implications (2013, neutral): “Several surveys to date have analyzed the role of social capital and trust in economics (see Guiso et al., 2008c and 2011; Tabellini, 2008a; Fehr, 2009 and Bowles and Polania-Reyes, 2012, among others).”
Trust and Credit: The Role of Appearance in Peer-to-peer Lending (2012, background): “11 Evidence in Fehr (2009) suggests that preferences and beliefs are independent of each other.”