Betrayal Aversion: Evidence from Brazil, China, Oman, Switzerland, Turkey, and the United States | Zendy

Iris Bohnet | Zendy; Fiona Greig | Zendy; Benedikt Herrmann | Zendy; Richard Zeckhauser | Zendy

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Betrayal Aversion: Evidence from Brazil, China, Oman, Switzerland, Turkey, and the United States

Author(s) -

Iris Bohnet,

Fiona Greig,

Benedikt Herrmann,

Richard Zeckhauser

Publication year - 2008

Publication title -

american economic review

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 16.936

H-Index - 297

eISSN - 1944-7981

pISSN - 0002-8282

DOI - 10.1257/aer.98.1.294

Subject(s) - betrayal , stochastic game , risk aversion (psychology) , outcome (game theory) , china , economics , dictator game , microeconomics , actuarial science , social psychology , psychology , political science , financial economics , expected utility hypothesis , law

Due to betrayal aversion, people take risks less willingly when the agent of uncertainty is another person rather than nature. Individuals in six countries (Brazil, China, Oman, Switzerland, Turkey, and the United States) confronted a binary-choice trust game or a risky decision offering the same payoffs and probabilities. Risk acceptance was calibrated by asking individuals their "minimum acceptable probability" (MAP) for securing the high payoff that would make them willing to accept the risky rather than the sure payoff. People's MAPs are generally higher when another person, rather than nature, determines the outcome. This indicates betrayal aversion. (JEL C72, D81, Z13)

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