Is it Betrayal Aversion or Regret Aversion ?

Itzhak Aharon

Recherches économiques de Louvain, 2012, vol. 78, issue 3, 101-114

Abstract: Social and economic exchanges often occur between strangers who cannot rely on past behavior or the prospect of future interactions to establish mutual trust. Game theorists formalize this problem in several "one-shot? game ? such as the trust game - predicting noncooperation ? since the investor is not expecting trustee to reciprocate it is not rationally to invest. Bohnet and Zeckhauser (2004) suggest that, due to betrayal aversion, people seek to avoid situation in which one could be betrayed. We argue that this behavior could emerge also due to regret aversion. JEL Classification: A12, A13, D81.

Keywords: trust; game theory; betrayal aversion; regret aversion; decision making; risk; gambling (search for similar items in EconPapers)
JEL-codes: A12 A13 D81 (search for similar items in EconPapers)
Date: 2012
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