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Harnessing the benefits of betrayal aversion

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  • Aimone, Jason A.
  • Houser, Daniel

Abstract

Recent research suggests that while betrayal aversion may have negative effects, the presence of betrayal-averse agents is beneficial in reducing trustees’ willingness to betray trust. In light of this, many common knowledge institutions may have adopted rules and features which mitigate the emotional disutility associated with betrayal aversion, while simultaneously maintaining the high levels of reciprocation brought about by the presence of betrayal-averse agents. Here we conduct a laboratory experiment that identifies one such feature common to many institutions successfully governing economic and social interaction: the option to avoid knowing painful details of failed economic exchange.

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  • Aimone, Jason A. & Houser, Daniel, 2013. "Harnessing the benefits of betrayal aversion," Journal of Economic Behavior & Organization, Elsevier, vol. 89(C), pages 1-8.
    • Handle: RePEc:eee:jeborg:v:89:y:2013:i:c:p:1-8
    DOI: 10.1016/j.jebo.2013.02.001
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    Cited by:

    1. Bolton Gary E. & Feldhaus Christoph & Ockenfels Axel, 2016. "Social Interaction Promotes Risk Taking in a Stag Hunt Game," German Economic Review, De Gruyter, vol. 17(3), pages 409-423, August.
    2. 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.
    3. Rojhat Avsar, 2021. "Rational Emotions: An Evolutionary Perspective," Review of Evolutionary Political Economy, Springer, vol. 2(2), pages 297-314, July.
    4. Cubitt, Robin & Gächter, Simon & Quercia, Simone, 2017. "Conditional cooperation and betrayal aversion," Journal of Economic Behavior & Organization, Elsevier, vol. 141(C), pages 110-121.
    5. Füllbrunn, Sascha & Vyrastekova, Jana, 2023. "Does trust break even? A trust-game experiment with negative endowments," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 103(C).
    6. Aimone, Jason A. & Pan, Xiaofei, 2020. "Blameable and imperfect: A study of risk-taking and accountability," Journal of Economic Behavior & Organization, Elsevier, vol. 172(C), pages 196-216.
    7. Thomas Markussen & Louis Putterman & Liangjun Wang, 2017. "Governing Collective Action in the Face of Observational Error," Working Papers 2017-2, Brown University, Department of Economics.
    8. Morreale, Azzurra & Mittone, Luigi & Lo Nigro, Giovanna, 2019. "Risky choices in strategic environments: An experimental investigation of a real options game," European Journal of Operational Research, Elsevier, vol. 279(1), pages 143-158.
    9. Rodet, Cortney S., 2015. "An experiment in political trust," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 57(C), pages 17-25.
    10. Rau, Holger & Müller, Stephan, 2018. "Betrayal Aversion and the Effectiveness of Incentive Contracts," VfS Annual Conference 2018 (Freiburg, Breisgau): Digital Economy 181638, Verein für Socialpolitik / German Economic Association.
    11. Thomas Markussen & Louis Putterman & Liangjun Wang, 2023. "Algorithmic Leviathan or Individual Choice: Choosing Sanctioning Regimes in the Face of Observational Error," Economica, London School of Economics and Political Science, vol. 90(357), pages 315-338, January.
    12. Li, Chen & Turmunkh, Uyanga & Wakker, Peter P., 2020. "Social and strategic ambiguity versus betrayal aversion," Games and Economic Behavior, Elsevier, vol. 123(C), pages 272-287.
    13. Simone Quercia, 2016. "Eliciting and measuring betrayal aversion using the BDM mechanism," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 2(1), pages 48-59, May.
    14. Gawn, Glynis & Innes, Robert, 2021. "Machiavelli Preferences Without Blame: Delegating Selfish vs. Generous Decisions in Dictator Games," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 90(C).
    15. Simone Quercia, 2015. "On the Elicitation and Measurement of Betrayal Aversion," Discussion Papers 2015-09, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    16. Kandul, Serhiy, 2016. "Ex-post blindness as excuse? The effect of information disclosure on giving," Journal of Economic Psychology, Elsevier, vol. 52(C), pages 91-101.
    17. Aimone, Jason A. & Butera, Luigi & Stratmann, Thomas, 2018. "Altruistic punishment in elections," European Journal of Political Economy, Elsevier, vol. 53(C), pages 149-160.

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    More about this item

    Keywords

    Betrayal aversion; Risk; Trust; Institutions;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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