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Do I Care if You Know I Betrayed You?

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  • James C. Cox
  • Danyang Li

Abstract

It has been reported that betrayal aversion in influences the trust decision (Bohnet and Zeckhauser 2004; Bohnet et al. 2008). This paper adds to the literature by examining how concern for others' disutility from betrayal can affect the decision to repay trust. We compare trustees' behavior when betrayal is obfuscated to an identical monetary payoffs situation where betrayal is revealed. We find that more trustees choose to defect in our experiment when betrayal is obfuscated than when it is revealed. Our result suggests that concern for betrayal costs influences not only the decision to trust but also the decision to repay trust.

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File URL: http://excen.gsu.edu/workingpapers/GSU_EXCEN_WP_2012-14.pdf
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Bibliographic Info

Paper provided by Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University in its series Experimental Economics Center Working Paper Series with number 2012-14.

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Length: 10
Date of creation: Sep 2012
Date of revision:
Handle: RePEc:exc:wpaper:2012-14

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Keywords: Experiments; Betrayal Cost; Trust; Cooperation;

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  1. Charness, Gary & Rabin, Matthew, 2002. "Understanding Social Preferences with Simple Tests," Department of Economics, Working Paper Series qt3d04q5sm, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  2. Cox, James C., 2004. "How to identify trust and reciprocity," Games and Economic Behavior, Elsevier, vol. 46(2), pages 260-281, February.
  3. James C. Cox & Vjollca Sadiraj, 2012. "Direct Tests Of Individual Preferences For Efficiency And Equity," Economic Inquiry, Western Economic Association International, vol. 50(4), pages 920-931, October.
  4. Fehr, Ernst & Schmidt, Klaus M., . "A theory of fairness, competition, and cooperation," Chapters in Economics, University of Munich, Department of Economics.
  5. Engelmann,Dirk & Strobel,Martin, 2002. "Inequality Aversion, Efficiency, and Maximin Preferences in Simple Distribution Experiments," Research Memorandum 015, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
  6. Guth, Werner & Schmittberger, Rolf & Schwarze, Bernd, 1982. "An experimental analysis of ultimatum bargaining," Journal of Economic Behavior & Organization, Elsevier, vol. 3(4), pages 367-388, December.
  7. Cox, James C. & Friedman, Daniel & Sadiraj, Vjollca, 2009. "Revealed Altruism," Santa Cruz Department of Economics, Working Paper Series qt6rb5t4mc, Department of Economics, UC Santa Cruz.
  8. Bohnet, Iris & Zeckhauser, Richard, 2004. "Trust, risk and betrayal," Journal of Economic Behavior & Organization, Elsevier, vol. 55(4), pages 467-484, December.
  9. James C. Cox & Vjollca Sadiraj, 2007. "On Modeling Voluntary Contributions to Public Goods," Public Finance Review, , vol. 35(2), pages 311-332, March.
  10. W. Guth & R. Schmittberger & B. Schwartz, 2010. "An experimental analysis of ultimatum bargaining," Levine's Working Paper Archive 291, David K. Levine.
  11. Jason Dana & Roberto Weber & Jason Kuang, 2007. "Exploiting moral wiggle room: experiments demonstrating an illusory preference for fairness," Economic Theory, Springer, vol. 33(1), pages 67-80, October.
  12. John R. Hamman & George Loewenstein & Roberto A. Weber, 2010. "Self-Interest through Delegation: An Additional Rationale for the Principal-Agent Relationship," American Economic Review, American Economic Association, vol. 100(4), pages 1826-46, September.
  13. James Andreoni & John Miller, 2002. "Giving According to GARP: An Experimental Test of the Consistency of Preferences for Altruism," Econometrica, Econometric Society, vol. 70(2), pages 737-753, March.
  14. Robert Slonim & Alvin E. Roth, 1998. "Learning in High Stakes Ultimatum Games: An Experiment in the Slovak Republic," Econometrica, Econometric Society, vol. 66(3), pages 569-596, May.
  15. Cary Deck, 2009. "An experimental analysis of cooperation and productivity in the trust game," Experimental Economics, Springer, vol. 12(1), pages 1-11, March.
  16. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
  17. James C. Cox & Cary A. Deck, 2005. "On the Nature of Reciprocal Motives," Economic Inquiry, Western Economic Association International, vol. 43(3), pages 623-635, July.
  18. Forsythe Robert & Horowitz Joel L. & Savin N. E. & Sefton Martin, 1994. "Fairness in Simple Bargaining Experiments," Games and Economic Behavior, Elsevier, vol. 6(3), pages 347-369, May.
  19. 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.
  20. Berg Joyce & Dickhaut John & McCabe Kevin, 1995. "Trust, Reciprocity, and Social History," Games and Economic Behavior, Elsevier, vol. 10(1), pages 122-142, July.
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