Betrayal Aversion on Four Continents

Iris Bohnet, Fiona Greig, Benedikt Herrmann and Richard Zeckhauser
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Fiona Greig: Harvard U
Benedikt Herrmann: U of Nottingham

Working Paper Series from Harvard University, John F. Kennedy School of Government

Abstract: Due to betrayal aversion, people take risks less willingly when the agent of uncertainty is another person rather than nature. Individuals in four countries (Brazil, Switzerland, the United Arab Emirates and the United States) confronted either a binary-choice trust game or a risky decision offering the same payoffs and probabilities. Risk acceptance was calibrated by asking individuals their “minimal acceptable probability” (MAP) for securing the high payoff that would make them just willing to accept the risky rather than the sure payoff. People’s MAPs are significantly higher when another person rather than nature determines the outcome. This indicates betrayal aversion.

JEL-codes: C72 (search for similar items in EconPapers)
Date: 2006-02
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Persistent link: https://EconPapers.repec.org/RePEc:ecl:harjfk:rwp06-005

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