What You Don't Know Won't Hurt You: A Laboratory Analysis of Betrayal Aversion

Aimone, Jason A.; Houser, Daniel

doi:10.2139/ssrn.1589146

Cited by 21 publications

(31 citation statements)

References 39 publications

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“…It is well recognized that efficient economic interactions often rely on trust, a decision that can have substantially negative consequences for the trustor. However, many studies indicate that trust (involving strategic uncertainty) is behaviourally distinct from risk (involving state uncertainty) [2][3][4][5][6][7]. In addition to research exploring the neural foundations of trust [8][9][10][11] and risk [12][13][14][15][16], recent research explores how the brain distinguishes these two types of decisions [17 -19].…”

Section: Introductionmentioning

confidence: 99%

“…We adapted the approach of Aimone & Houser [6] to examine the neural correlates of betrayal aversion. We used a design that allowed us to examine both within-and between-subject effects of betrayal aversion.…”

Section: Introductionmentioning

confidence: 99%

“…Betrayal aversion is known to influence trust decisions in these games. The other half were trust games where betrayal aversion could not influence decision-making (following [5][6][7]) through the introduction of a computer mediator.…”

Section: Introductionmentioning

confidence: 99%

“…Consequently, social and monetary risk preferences cannot underlie any between-treatment behavioural differences. Finally, as detailed by Aimone & Houser [6], computer mediation shields investors from knowing their own counterpart's betrayal decision, so that betrayal aversion cannot impact decisions.…”

Section: Introductionmentioning

confidence: 99%

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Neural signatures of betrayal aversion: an fMRI study of trust

2014

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Decisions are said to be 'risky' when they are made in environments with uncertainty caused by nature. By contrast, a decision is said to be 'trusting' when its outcome depends on the uncertain decisions of another person. A rapidly expanding literature reveals economically important differences between risky and trusting decisions, and further suggests these differences are due to 'betrayal aversion'. While its neural foundations have not been previously illuminated, the prevailing hypothesis is that betrayal aversion stems from a desire to avoid negative emotions that arise from learning one's trust was betrayed. Here, we provide evidence from an fMRI study that supports this hypothesis. In particular, our data indicate that the anterior insula modulates trusting decisions that involve the possibility of betrayal.

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Neural signatures of betrayal aversion: an fMRI study of trust

2014

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“…First, some studies reported no significant relationship between individual risk attitudes and the propensity to trust strangers (Eckel and Wilson 2004;Houser et al 2010). Second, taking a risky bet is not equivalent to the decision to trust a stranger as the latter often requires an additional premium to compensate for the cost of "trust betrayal" or disadvantageous inequality (Aimone and Houser 2010;Bohnet and Zeckhauser 2004;Hong and Bohnet 2007). We address this issue directly in Experiment 2 the goal of which was to disentangle the effect of tournament incentives on pure risk taking and their effect on trust relationships.…”

Section: Indirect Effect Of Competition On Trust and Trustworthinessmentioning

confidence: 99%

Does competition foster trust? The role of tournament incentives

Keck

Karelaia

2011

Exp Econ

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Members of organizations are often called upon to trust others and to reciprocate trust while at the same time competing for bonuses or promotions. We suggest that competition affects trust not only within dyads including direct competitors, but also between individuals who do not compete against each other. We test this idea in a trust game where trustors and trustees are rewarded based either on their absolute performance or on how well they do relative to players from other dyads. In Experiment 1, we show that competition among trustors significantly increases trust. Competition among trustees decreases trustworthiness, but trustors do not anticipate this effect. In Experiment 2, we additionally show that the increase in trust under competition is caused by a combination of increased risk taking and lower sensitivity to non-financial concerns specific to trust interactions. Our results suggest that tournament incentives might have a "blinding effect" on considerations such as betrayal and inequality aversion.

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Eliciting and measuring betrayal aversion using the BDM mechanism

Quercia

2016

J Econ Sci Assoc

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Betrayal aversion has been operationalized as the evidence that subjects demand a higher risk premium to take social risks compared to natural risks. This evidence has been first shown by Bohnet and Zeckhauser (2004) using an adaptation of the Becker -DeGroot -Marschak mechanism (BDM, Becker et al. (1964)). We compare their implementation of the BDM mechanism with a new version designed to facilitate subjects' comprehension. We find that, although the two versions produce different distributions of values, the size of betrayal aversion, measured as an average treatment difference between social and natural risk settings, is not different across the two versions. We further show that our implementation is preferable to use in practice as it reduces substantially subjects' mistakes and the likelihood of noisy valuations.

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What You Don't Know Won't Hurt You: A Laboratory Analysis of Betrayal Aversion

Cited by 21 publications

References 39 publications

Neural signatures of betrayal aversion: an fMRI study of trust

Neural signatures of betrayal aversion: an fMRI study of trust

Does competition foster trust? The role of tournament incentives

Eliciting and measuring betrayal aversion using the BDM mechanism

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