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Aversions to trust

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  • Anne Corcos François Pannequin

    (LEM - Laboratoire d'Économie Moderne - Université Paris II - Panthéon-Assas : EA4442)

  • Sacha Bourgeois-Gironde

    ()
    (LEM - Laboratoire d'Économie Moderne - Université Paris II - Panthéon-Assas : EA4442, IJN - Institut Jean-Nicod - CNRS : UMR8129 - École normale supérieure [ENS] - Paris - École des Hautes Études en Sciences Sociales (EHESS))

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    Abstract

    In this article, we focus on two types of "aversion" which we deem essential aspects of the notion of trust: betrayal aversion (social) and ambiguity aversion (a special case of aversion to uncertainty). Based on trust-games studies in experimental economics and neuroeconomics, our main goal is to assess the conceptual, behavioral and neurobiological connections between betrayal and ambiguity aversions. From a social and individual psychological point of view the bottom line of our trusting behavior could be our general aversion to ambiguous signals. We approach social trust in the terms of a phenomenon based on uncertainty aversion.Specifically, a reduction of the perceived uncertainty of a social interaction tends to build up a trusting climate conducive to trade by decreasing betrayal aversion.We hypothesize that betrayal aversion and ambiguity aversion bear such a negative correlation. Focusing on this potential negative correlation our approach clearly differs from more positive accounts of trust centred on altruism.

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    Bibliographic Info

    Paper provided by HAL in its series Post-Print with number ijn_00734564.

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    Date of creation: 25 Nov 2012
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    Publication status: Published, Louvain Economic Review, 2012, 78, 3/4, 152-173
    Handle: RePEc:hal:journl:ijn_00734564

    Note: View the original document on HAL open archive server: http://jeannicod.ccsd.cnrs.fr/ijn_00734564
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    Related research

    Keywords: trust game - betrayal aversion - ambiguity aversion - neuroeconomics;

    This paper has been announced in the following NEP Reports:

    References

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    1. Houser, Daniel & Schunk, Daniel & Winter, Joachim, 2010. "Distinguishing trust from risk: An anatomy of the investment game," Journal of Economic Behavior & Organization, Elsevier, vol. 74(1-2), pages 72-81, May.
    2. Kiridaran Kanagaretnam & Stuart Mestelman & Khalid Nainar & Mohamed Shehata, 2009. "The Impact of Social Value Orientation and Risk Attitudes on Trust and Reciprocity," Department of Economics Working Papers 2008-06, McMaster University.
    3. Anne Corcos & François Pannequin & Sacha Bourgeois-gironde, 2012. "Is trust an ambiguous rather than a risky decision?," Economics Bulletin, AccessEcon, vol. 32(3), pages 2255-2266.
    4. Guiso, Luigi & Sapienza, Paola & Zingales, Luigi, 2005. "Trusting the Stock Market," CEPR Discussion Papers 5288, C.E.P.R. Discussion Papers.
    5. Bohnet, Iris & Zeckhauser, Richard, 2003. "Trust, Risk and Betrayal," Working Paper Series rwp03-041, Harvard University, John F. Kennedy School of Government.
    6. Sacha Bourgeois-gironde & Anne Corcos, 2011. "Discriminating strategic reciprocity and acquired trust in the repeated trust-game," Economics Bulletin, AccessEcon, vol. 31(1), pages 177-188.
    7. repec:hal:journl:ijn_00734563 is not listed on IDEAS
    8. Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
    9. Berg Joyce & Dickhaut John & McCabe Kevin, 1995. "Trust, Reciprocity, and Social History," Games and Economic Behavior, Elsevier, vol. 10(1), pages 122-142, July.
    10. Sacha Bourgeois-Gironde & Anne Corcos, 2011. "Discriminating strategic reciprocity and acquired trust in the repeated trust-game," Post-Print ijn_00713460, HAL.
    11. Daniel Ellsberg, 2000. "Risk, Ambiguity and the Savage Axioms," Levine's Working Paper Archive 7605, David K. Levine.
    12. Olsen, Robert A., 2008. "Trust as risk and the foundation of investment value," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(6), pages 2189-2200, December.
    13. Sujoy Chakravarty & Jaideep Roy, 2009. "Recursive expected utility and the separation of attitudes towards risk and ambiguity: an experimental study," Theory and Decision, Springer, Springer, vol. 66(3), pages 199-228, March.
    14. Camerer, Colin & Weber, Martin, 1992. " Recent Developments in Modeling Preferences: Uncertainty and Ambiguity," Journal of Risk and Uncertainty, Springer, Springer, vol. 5(4), pages 325-70, October.
    15. Sacha Bourgeois-Gironde & Anne Corcos & François Pannequin, 2012. "Is trust an ambiguous rather than a risky decision," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) ijn_00734563, HAL.
    16. Laura Schechter, 2005. "Traditional trust measurement and the risk confound: An experiment in rural paraguay," Artefactual Field Experiments 00106, The Field Experiments Website.
    17. Cox, James C., 2004. "How to identify trust and reciprocity," Games and Economic Behavior, Elsevier, vol. 46(2), pages 260-281, February.
    18. Eckel, Catherine C. & Wilson, Rick K., 2004. "Is trust a risky decision?," Journal of Economic Behavior & Organization, Elsevier, vol. 55(4), pages 447-465, December.
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