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Testing the causes of betrayal aversion

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  • Humphrey, Steven J.
  • Mondorf, Stefan

Abstract

Betrayal–aversion is the observation that decision-makers in a trust situation are more averse to uncertainty when it derives from the unknown behavior of others than when it derives from nature. This effect has been attributed to the anticipated disutility of discovering that trust placed in another person has been betrayed. We report new experimental results which suggest a different interpretation of some of the extant data. We observe that a role is played by the reluctance to give-up decision rights to another person, even when that person cannot deliberately betray their trustor. We find treatment effects only for males. Loss-aversion does not explain our data.

Suggested Citation

  • Humphrey, Steven J. & Mondorf, Stefan, 2021. "Testing the causes of betrayal aversion," Economics Letters, Elsevier, vol. 198(C).
    • Handle: RePEc:eee:ecolet:v:198:y:2021:i:c:s0165176520304237
    DOI: 10.1016/j.econlet.2020.109663
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    References listed on IDEAS

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    More about this item

    Keywords

    Betrayal-aversion; Decision rights; Loss-aversion; Gender effects; Risky dictator game; Trust game; Risky dis-coordination game;
    All these keywords.

    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
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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