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Disloyalty aversion: Greater reluctance to bet against close others than the self

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  • Tang, Simone
  • Morewedge, Carey M.
  • Larrick, Richard P.
  • Klein, Jill G.

Abstract

We examine the mechanisms by which loyalty can induce risk seeking. In seven studies, participants exhibited disloyalty aversion—they were more reluctant to bet on the failure of a close other than on their own failure. In contrast, participants were just as willing to bet on the failure of strangers as on their own failure. This effect persisted when bets were made in private, payouts were larger for betting on failure than success (Studies 1–4, 6), and failure was most likely (Studies 2–6). We propose that disloyalty aversion occurs because the negative identity signal to the self that hedging creates can outweigh the rewards conferred by hedging. Indeed, disloyalty aversion was moderated by factors affecting the strength of this self-signal and the payout of the hedge, including the closeness of the other person, bettors’ trait loyalty, and payout magnitude (Studies 3–5). Disloyalty aversion strongly influences social preferences involving risk.

Suggested Citation

  • Tang, Simone & Morewedge, Carey M. & Larrick, Richard P. & Klein, Jill G., 2017. "Disloyalty aversion: Greater reluctance to bet against close others than the self," Organizational Behavior and Human Decision Processes, Elsevier, vol. 140(C), pages 1-13.
    • Handle: RePEc:eee:jobhdp:v:140:y:2017:i:c:p:1-13
    DOI: 10.1016/j.obhdp.2017.02.001
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    2. Noval, Laura J. & Molinsky, Andrew & Stahl, Günter K., 2018. "Motivated dissimilarity construal and self-serving behavior: How we distance ourselves from those we harm," Organizational Behavior and Human Decision Processes, Elsevier, vol. 148(C), pages 145-158.
    3. Kossuth, Lajos & Powdthavee, Nattavudh & Harris, Donna & Chater, Nick, 2020. "Does it pay to bet on your favourite to win? Evidence on experienced utility from the 2018 FIFA World Cup experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 171(C), pages 35-58.

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