Gain-loss framing effects in dilemmas of trust and reciprocity

Abstract

How do trust and reciprocity decisions change when outcomes are framed in terms of potential losses (vs gains)? In two studies, with 7464 trust decisions from 359 participants and 2723 reciprocity decisions from 221 participants, we find that loss framing increases mean-level trust, but has no effect on mean-level reciprocity. Additionally, loss framing changes how decisions are made: In the domain of losses, trustors and trustees become less calculative — trust decisions involving losses are less sensitive to changes in expected value and reciprocity decisions are less sensitive to the financial temptation to betray trust. Critically, these changes in the process of decision-making are more pronounced when people interact with a human (vs computer) partner, pointing to uniquely social consequences of loss framing. The present results contribute to our understanding of the factors that shape trust and reciprocity, and emphasize that interpersonal processes play an important but under examined role in gain-loss framing effects.