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Harnessing the Benefits of Betrayal Aversion

  • Jason A. Aimone


    (Virginia Tech Carilion Research Institute)

  • Daniel Houser


    (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University)

Recent research suggests that while there are negative effects of betrayal aversion, that the presence of betrayal-averse agents is beneficial in reducing trusteesÕ willingness to betray trust. If true, then many common knowledge institutions may have adopted institutional 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 which identifies a prevalent successful institutional feature common to many every-day institutions: the voluntary, but not forced, option to discover the painful details of failed economic exchange. Length: 29

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Paper provided by George Mason University, Interdisciplinary Center for Economic Science in its series Working Papers with number 1030.

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Date of creation: Jan 2012
Date of revision:
Handle: RePEc:gms:wpaper:1030
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  1. Zeckhauser, Richard Jay & Herrmann, Benedikt & Bohnet, Iris, 2010. "Trust and the Reference Points for Trustworthiness in Gulf and Western Countries," Scholarly Articles 9647371, Harvard Kennedy School of Government.
  2. Daniel Houser & Daniel Schunk & Joachim Winter, 2006. "Trust Games Measure Trust," MEA discussion paper series 06112, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
  3. Jason Aimone & Daniel Houser, 2008. "What You Don't Know Won't Hurt You: A Laboratory Analysis of Betrayal Aversion," Working Papers 1008, George Mason University, Interdisciplinary Center for Economic Science, revised Sep 2008.
  4. 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.
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  7. Hong, Kessely & Bohnet, Iris, 2007. "Status and distrust: The relevance of inequality and betrayal aversion," Journal of Economic Psychology, Elsevier, vol. 28(2), pages 197-213, April.
  8. Daniel Houser & John Wooders, 2006. "Reputation in Auctions: Theory, and Evidence from eBay," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 15(2), pages 353-369, 06.
  9. Erte Xiao & Daniel Houser, 2005. "Emotion expression in human punishment behavior," Experimental 0504003, EconWPA, revised 18 May 2005.
  10. Charness, Gary B & Dufwenberg, Martin, 2006. "Promises & Partnership," University of California at Santa Barbara, Economics Working Paper Series qt0127h86v, Department of Economics, UC Santa Barbara.
  11. Houser, Daniel & Schunk, Daniel & Winter, Joachim, 2010. "Distinguishing trust from risk: An anatomy of the investment game," Munich Reprints in Economics 19378, University of Munich, Department of Economics.
  12. Ernst Fehr, 2009. "On The Economics and Biology of Trust," Journal of the European Economic Association, MIT Press, vol. 7(2-3), pages 235-266, 04-05.
  13. Iris Bohnet & Fiona Greig & Benedikt Herrmann & Richard Zeckhauser, 2008. "Betrayal Aversion: Evidence from Brazil, China, Oman, Switzerland, Turkey, and the United States," American Economic Review, American Economic Association, vol. 98(1), pages 294-310, March.
  14. 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.
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  16. Berg Joyce & Dickhaut John & McCabe Kevin, 1995. "Trust, Reciprocity, and Social History," Games and Economic Behavior, Elsevier, vol. 10(1), pages 122-142, July.
  17. 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.
  18. Bohnet, Iris & Zeckhauser, Richard, 2003. "Trust, Risk and Betrayal," Working Paper Series rwp03-041, Harvard University, John F. Kennedy School of Government.
  19. Koehler, Jonathan J. & Gershoff, Andrew D., 2003. "Betrayal aversion: When agents of protection become agents of harm," Organizational Behavior and Human Decision Processes, Elsevier, vol. 90(2), pages 244-261, March.
  20. Gary Charness & Martin Dufwenberg, 2004. "Promises and Partnership," Levine's Bibliography 122247000000000001, UCLA Department of Economics.
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