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Trust and Cheating [report]

Jeffrey Butler, Paola Giuliano, Luigi Guiso
2012 unpublished
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 the behavior of the driver a¤ected by beliefs about our cheating notions, and where do his beliefs come from? For that matter, where do our cheating notions come from, and how do they color our own decisions? We address these questions in the context of a trust game by asking participants directly about their personal notions of
more » ... ersonal notions of cheating. We ...nd that both parties to a trust exchange have personal notions of what constitutes cheating; that these notions have a bimodal distribution; and that cheating notions are determined by parentally-transmitted values. We also document that cheating notions substantially a¤ect decisions on both sides of the trust exchange. We ...nally link our results to guilt aversion models and provide a more general view on the type of preferences that could explain receivers'cheating decisions. JEL Classi...cation: A1, A12, D1, O15, Z1
doi:10.3386/w18509 fatcat:okvf54gkfva43jf5xrpnenw4ee