Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/35621 
Authors: 
Year of Publication: 
2008
Series/Report no.: 
IZA Discussion Papers No. 3895
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
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.
Subjects: 
Trust
preferences
beliefs
biological basis
JEL: 
C7
D00
D2
D7
D8
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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