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Betrayal Aversion: Evidence from Brazil, China, Oman, Switzerland, Turkey, and the United States: Comment

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Author Info

  • Gary E. Bolton
  • Axel Ockenfels

Abstract

In a series of binary choice problems, we investigate how a chooser's risk taking changes when others share in their personal risk, either equally or unequally. We find that when the safe option yields inequality, the risky option is taken significantly more often. On the other hand, the inequality resulting from the risky choice does not affect risk taking. We also find that choosers tend to be less risk-averse in a one-person context compared to when the risk also affects the payoff of another. (C72, D81, Z13)

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/aer.100.1.628
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File URL: http://www.aeaweb.org/aer/data/mar2010/20081034_app.pdf
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Bibliographic Info

Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 100 (2010)
Issue (Month): 1 (March)
Pages: 628-33

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Handle: RePEc:aea:aecrev:v:100:y:2010:i:1:p:628-33

Note: DOI: 10.1257/aer.100.1.628
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References

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  1. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-91, March.
  2. Machina, Mark J, 1989. "Dynamic Consistency and Non-expected Utility Models of Choice under Uncertainty," Journal of Economic Literature, American Economic Association, vol. 27(4), pages 1622-68, December.
  3. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March.
  4. Charness, Gary, 2000. "Responsibility and effort in an experimental labor market," Journal of Economic Behavior & Organization, Elsevier, vol. 42(3), pages 375-384, July.
  5. Bowles, Hannah Riley & Babcock, Linda & McGinn, Kathleen L., 2005. "Constraints and Triggers: Situational Mechanics of Gender in Negotiation," Working Paper Series rwp05-051, Harvard University, John F. Kennedy School of Government.
  6. Matthew Rabin., 1992. "Incorporating Fairness into Game Theory and Economics," Economics Working Papers 92-199, University of California at Berkeley.
  7. Donkers, Bas & Melenberg, Bertrand & Van Soest, Arthur, 2001. " Estimating Risk Attitudes Using Lotteries: A Large Sample Approach," Journal of Risk and Uncertainty, Springer, vol. 22(2), pages 165-95, March.
  8. Ockenfels, Axel & Sliwka, Dirk & Werner, Peter, 2010. "Bonus Payments and Reference Point Violations," IZA Discussion Papers 4795, Institute for the Study of Labor (IZA).
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Citations

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Cited by:
  1. Andersson, Ola & Holm, Håkan J. & Tyran, Jean-Robert & Wengström, Erik, 2013. "Risking Other People’s Money: Experimental Evidence on Bonus Schemes, Competition, and Altruism," Working Paper Series 989, Research Institute of Industrial Economics.
  2. Steven J. Humphrey & Elke Renner, 2011. "The social costs of responsibility," Discussion Papers 2011-02, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  3. Dreber, Anna & Rand, David & Wernerfelt, Nils & Worrell, Peter & Zeckhauser, Richard, 2013. "The Decisions of Entrepreneurs and Their Agents: Revealed Levels of Risk Aversion and Betrayal Aversion," Working Paper Series rwp13-016, Harvard University, John F. Kennedy School of Government.
  4. Christoph Engel & Lilia Zhurakhovska, 2012. "Harm on an Innocent Outsider as a Lubricant of Cooperation – An Experiment," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2012_02, Max Planck Institute for Research on Collective Goods.
  5. Pahlke, Julius & Strasser, Sebastian & Vieider, Ferdinand M., 2012. "Risk-taking for others under accountability," Economics Letters, Elsevier, vol. 114(1), pages 102-105.
  6. Fetchenhauer, Detlef & Dunning, David, 2012. "Betrayal aversion versus principled trustfulness—How to explain risk avoidance and risky choices in trust games," Journal of Economic Behavior & Organization, Elsevier, vol. 81(2), pages 534-541.
  7. Christoph Engel & Lilia Zhurakhovska, 2011. "Oligopoly as a Socially Embedded Dilemma. An Experiment," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2011_01, Max Planck Institute for Research on Collective Goods.
  8. Astrid Gamba & Elena Manzoni, 2014. "Social comparison and risk taking behavior," Working Papers 266, University of Milano-Bicocca, Department of Economics, revised Jan 2014.
  9. Trautmann, Stefan T. & Wakker, Peter P., 2010. "Process fairness and dynamic consistency," Economics Letters, Elsevier, vol. 109(3), pages 187-189, December.
  10. Alexia Gaudeul, 2013. "Social preferences under uncertainty," Jena Economic Research Papers 2013-024, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  11. Christoph Engel & Bettina Rockenbach, 2009. "We Are Not Alone: The Impact of Externalities on Public Good Provision," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2009_29, Max Planck Institute for Research on Collective Goods, revised May 2011.

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