What You Don't Know Won't Hurt You: A Laboratory Analysis of Betrayal Aversion
Jason Aimone and
Daniel Houser ()
No 1008, Working Papers from George Mason University, Interdisciplinary Center for Economic Science
Trust promotes economic growth and development, and previous research has shed much light on reciprocity and other motives for trusting decisions. Why people choose not to trust has received substantially less attention, perhaps in part because not trusting is predicted by standard economic theory: selfish people consider the (perhaps subjective) stochastic nature of the environment and make the earnings-maximizing decision. This explanation is incomplete: we provide evidence from a laboratory analysis with an investment game that people's decisions vary according to how an environment's uncertainty will be resolved. In particular, if resolving uncertainty requires an investor to learn whether her trustee chose to betray then she is much less likely to trust. Our data thus provide evidence that ¡°betrayal aversion¡± detrimentally affects propensities for trusting decisions. Our results also emphasize the importance of impersonal, institution-mediated exchange in promoting investment and economic efficiency.
New Economics Papers: this item is included in nep-cbe and nep-exp
Date: 2008-09, Revised 2008-09
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (8) Track citations by RSS feed
Downloads: (external link)
http://www.gmu.edu/schools/chss/economics/icesworkingpapers.gmu.edu/pdf/1008.pdf Latest version, 2008 (application/pdf)
Journal Article: What you don’t know won’t hurt you: a laboratory analysis of betrayal aversion (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: http://EconPapers.repec.org/RePEc:gms:wpaper:1008
Access Statistics for this paper
More papers in Working Papers from George Mason University, Interdisciplinary Center for Economic Science Contact information at EDIRC.
Series data maintained by Stan Tsirulnikov ().