Working Paper: CEPR ID: DP9202
Authors: Jeff Butler; Paola Giuliano; Luigi Guiso
Abstract: When we take a cab we may feel cheated if the driver takes an unnecessarily long route despite the lack of a contract or promise to take the shortest possible path. Is our decision to take the cab affected by our belief that we may end up feeling cheated? Is the behavior of the driver affected by his beliefs about what we consider cheating? We address these questions in the context of a trust game by asking participants directly about their notions of cheating. We find that: i) both parties to a trust exchange have implicit notions of what constitutes cheating even in a context without promises or messages; ii) these notions are not unique - the vast majority of senders would feel cheated by a negative return on their trust/investment, whereas a sizable minority defines cheating according to an equal split rule; iii) these implicit notions affect the behavior of both sides to the exchange in terms of whether to trust or cheat and to what extent. Finally, we show that individuals? notions of what constitutes cheating can be traced back to two classes of values instilled by parents: cooperative and competitive. The first class of values tends to soften the notion while the other tightens it.
Keywords: cheating; culture; social norms; trust; trustworthiness
JEL Codes: A1; A12; D1; O15; Z1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| senders' beliefs about being cheated (Z13) | amount sent (F35) |
| receivers' beliefs about senders' cheating notions (D83) | return amounts (Y10) |
| likelihood of being cheated (Z13) | amount sent (F35) |
| personal cheating notions (Z13) | cheating behavior (K42) |
| parentally instilled values (A13) | individual cheating notions (Z13) |