Trust, Risk and Betrayal

Bohnet, Iris; Zeckhauser, Richard J.

doi:10.2139/ssrn.478424

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Trust, Risk and Betrayal

29 Pages Posted: 17 Dec 2003

See all articles by Iris Bohnet

Iris Bohnet

Harvard University - Harvard Kennedy School (HKS)

Richard J. Zeckhauser

Harvard University - Harvard Kennedy School (HKS); National Bureau of Economic Research (NBER)

There are 2 versions of this paper

Date Written: October 6, 2003

Abstract

Using experiments, we examine whether the decision to trust a stranger in a one-shot interaction is equivalent to taking a risky bet, or if a trust decision entails an additional risk premium to balance the costs of trust betrayal. We compare a binary-choice Trust game with a structurally identical, binary-choice Risky Dictator game with good or bad outcomes. We elicit individuals' minimum acceptable probabilities (MAPs) of getting the good outcome such that they would prefer the chance to the sure payoff. First movers state higher MAPs in the Trust game than in situations where nature determines the outcome.

Keywords: Advocacy and persuasion, economics, econometric theory, ethics, political philosophy, law and legal Institutions, leadership, conflict management

JEL Classification: D74, D81

Suggested Citation: Suggested Citation

Bohnet, Iris and Zeckhauser, Richard J., Trust, Risk and Betrayal (October 6, 2003). Available at SSRN: https://ssrn.com/abstract=478424 or http://dx.doi.org/10.2139/ssrn.478424