Events at CERGE-EI

Prof. Luigi Luini

University of Siena, Italy

Authors: Luigi Luini, Annamaria Nese, and Patrizia Sbriglia

Abstract: The aim of this paper is to ascertain whether trust is affected by contagion and herding in small groups of trustors who can observe each other’s choices over time. We account for three factors of trustors’ preferences, namely: risk attitude, generosity and expected trustworthiness. We test the basic hypothesis that an individual's propensity to trust recipients in the Trust Game can be affected by the observed behavior of other trustors. Our results confirm that trust is affected by contagion effects. Furthermore, we find that specific types of agents (generous or untrusting) more often imitate the same type, when positioned in the same group. Finally, we find that untrusting individuals are less affected by their peers compared to generous individuals, and they imitate less even when positioned in groups of agents who have the same characteristics.

Full Text: “Social influence in trustors’ neighborhoods”