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Betrayal aversion versus principled trustfulness—How to explain risk avoidance and risky choices in trust games

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  • Fetchenhauer, Detlef
  • Dunning, David

Abstract

Are decisions in a trust game more or less sensitive to changes in risk than decisions in a purely financial, non-social decision-making task? Participants in a binary trust game (they could either keep $5 for sure or give it to a trustee with the chance of getting $10 back) were informed that their chance of interacting with a trustworthy person was either 46 percent or 80 percent and then were asked to decide whether to trust that other person. In addition, participants made a decision in a lottery (i.e., whether to gamble $5 to win $10) with the same probabilities. In the 46 percent condition, participants were significantly more willing to choose the risky option in the trust game than in the lottery. Overall, the difference in probability of receiving money back had a significantly higher impact on the lottery decision than on the decision to trust. Possible interpretations of the present study and its relation to previous findings are discussed.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:jeborg:v:81:y:2012:i:2:p:534-541
    DOI: 10.1016/j.jebo.2011.07.017
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    References listed on IDEAS

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    Cited by:

    1. Cubitt, Robin & Gächter, Simon & Quercia, Simone, 2017. "Conditional cooperation and betrayal aversion," Journal of Economic Behavior & Organization, Elsevier, vol. 141(C), pages 110-121.
    2. Gary E. Bolton & Christoph Feldhaus & Axel Ockenfels, 2016. "Social Interaction Promotes Risk Taking in a Stag Hunt Game," German Economic Review, Verein für Socialpolitik, vol. 17(3), pages 409-423, August.
    3. repec:jdm:journl:v:12:y:2017:i:6:p:584-595 is not listed on IDEAS
    4. Gomaa, Mohamed & Kanagaretnam, Kiridaran & Mestelman, Stuart & Shehata, Mohamed, 2015. "Exercising empowerment in an investment environment," Journal of Behavioral and Experimental Finance, Elsevier, vol. 7(C), pages 33-41.
    5. Sonsino, Doron & Shifrin, Max & Lahav, Eyal, 2016. "Disentangling trust from risk-taking: Triadic approach," MPRA Paper 80095, University Library of Munich, Germany.
    6. Ece Yagman & Malcolm Keswell, 2015. "Accents, Race and Discrimination: Evidence from a Trust Game," SALDRU Working Papers 158, Southern Africa Labour and Development Research Unit, University of Cape Town.
    7. Aimone, Jason A. & Houser, Daniel, 2013. "Harnessing the benefits of betrayal aversion," Journal of Economic Behavior & Organization, Elsevier, vol. 89(C), pages 1-8.
    8. Fairley, Kim & Sanfey, Alan & Vyrastekova, Jana & Weitzel, Utz, 2016. "Trust and risk revisited," Journal of Economic Psychology, Elsevier, vol. 57(C), pages 74-85.

    More about this item

    Keywords

    Trust; Risk taking; Economic games;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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