Jeffrey V. Butler, Paola Giuliano, Luigi Guiso, Tuesday, December 18, 2012

Trust among strangers is at the heart of well-functioning market economics. This column argues that individual trust beliefs are related to individual trustworthiness, which in turn is related to the values parents transmit to their children. It adds that if someone forms trust beliefs about unknown people by attributing to others his own trustworthiness, he is bound to make mistakes by being either too naïve or too wary.