Can shared identity reduce trust? Evidence from the Italian North–South divide

We study the North-South divide in Italy, a paradigmatic case of within-country differences, to investigate whether regional differences in cooperation and trust stem from stable generalized preferences or context-dependent expectations. We conducted a survey experiment with 2405 Italians under three conditions: (a) no-information about the counterpart's region, (b) knowing they share region, (c) knowing they are from opposite area. No regional differences were found in the no-information condition, but significant decrease in trust beliefs emerged when Southerners interacted with fellow Southerners. Our results suggest that negative in-group expectations drive regional differences, though evidence is mixed across methods.