Disentangling Trust from Risk-Taking: Triadic Approach

35 Pages Posted: 9 May 2017

See all articles by Doron Sonsino

Doron Sonsino

Ben-Gurion University of the Negev; Center for Academic Studies

Max Shifrin

College of Management Academic Studies

Eyal Lahav

The Open University of Israel

Date Written: April 1, 2017

Abstract

The willingness to trust human receivers is compared to the inclination to take lottery risk in six distinct scenarios, controlling the return distributions. Trust shows significantly smaller responsiveness to return expectations compared to parallel pure-risk lottery allocation, and paired comparisons reveal that investors sacrifice 5% of the expected payoff to trust anonymous receivers. Trust is more calculated and volatile for males, while appearing relative stable for females. The results complement the accumulating evidence regarding physiological differences between trust and risk, in addition suggesting that the trust-risk differences are stronger for females.

Keywords: Trust, risk, gender, ambiguity, betrayal aversion

JEL Classification: C72, C90, D80

Suggested Citation

Sonsino, Doron and Sonsino, Doron and Shifrin, Max and Lahav, Eyal, Disentangling Trust from Risk-Taking: Triadic Approach (April 1, 2017). Available at SSRN: https://ssrn.com/abstract=2964871 or http://dx.doi.org/10.2139/ssrn.2964871

Doron Sonsino (Contact Author)

Ben-Gurion University of the Negev ( email )

1 Ben-Gurion Blvd
Beer-Sheba 84105, 84105
Israel

Center for Academic Studies ( email )

Ha-Yotsrim 2
Or Yehuda, 6021816
Israel

Max Shifrin

College of Management Academic Studies ( email )

Elie Wiesel St 2
Rishon LeTsiyon
Israel

Eyal Lahav

The Open University of Israel ( email )

1 University Road
43107
Raanana
Israel

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