Trust, Beliefs and Cooperation: An Experiment
Duk Gyoo Kim, Louis Putterman, Xinyi Zhang
EconStor Working Paper · 2019
Abstract
Examines how beliefs about others' trustworthiness form and update, and how those beliefs sustain or unravel cooperation over repeated interactions.
Methodology
Controlled experiment eliciting subjects' beliefs alongside their trusting and cooperative choices, allowing the authors to separate the role of expectations from that of social preferences.
Findings
Cooperation is tightly linked to beliefs about others' behavior: accurate, optimistic beliefs support trust, while pessimistic belief-updating after negative experiences drives cooperation downward, showing that trust is as much a belief problem as a preference problem.
Applied nudge
Manage expectations, not just incentives—seed accurate optimistic beliefs about how cooperatively others behave, because a single salient betrayal can collapse trust faster than incentives can rebuild it.
Citation
Kim, D. G., Putterman, L., & Zhang, X. (2019). Trust, beliefs and cooperation: An experiment. EconStor Working Paper.
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