2
1.
Introduction
In trusting we render ourselves vulnerable. If our trust is well placed, i.e., if the object
of our trust is worthy, it reaps positive returns. But if our trust is poorly placed it leads
to losses. Whether trust is well or poorly placed depends in large part on the accuracy
of the expectations upon which it is based. And how accurate an individual’s
expectations are depends on the amount and quality of the information they have and
on how they process that information. Ceteris paribus, any bias in the way in which
individuals construct and process their information sets, any ill founded beliefs about
whether and how particular elements in their information set predict trustworthiness,
will result in greater vulnerability and a higher probability of loss or in missed
opportunities for positive return.
Recent experimental studies indicate that expectations of trustworthiness do indeed
affect trustors’ behaviour (Ashraf et al., 2004; Barr, 2003; Burns, 2004) and some
have identified biases. Table 1 provides information on trustees’ characteristics that
have been found to impact on trustors’ behaviour and whether there is evidence of
those characteristics also affecting trustworthiness. It shows that Burns (2004), for
example, found that in South Africa black school children are trusted less than white
and coloured school children even though they are no less trustworthy, while
Ferstman and Gneezy (2001, 2002) found that Eastern Jews relative to Ashkenazic
Jews are trusted less despite no evidence that they are less trustworthy.
However, the way in which the subjects in these and other experiments receive the
information upon which they base their decisions is considerably different to the way
in which individuals acquire information about the people with whom they interact in
Convention