The effect of consequential thinking on trust game behavior

Abstract

AbstractContrary to rational Expected Monetary Value (EMV) predictions that no money will be transferred in Trust Games, in experiments players make positive transfers. Theorists have proposed modifying the Sender's utility function while retaining utility‐maximization assumptions to account for this behavior. Such accounts assume that Senders can grasp the possible outcomes of their choices, their probabilities, and utilities. In reality, however, Senders' choices are unexpectedly complex, and the assumption that they approximate expected utility maximization is highly implausible. Instead, we suggest that Senders are guided by general propensities to trust others. Two experiments examine the effect of inducing consequential thought on Sender behavior. One induced consequential thought directly; the other did so indirectly. The amount sent was significantly reduced following either manipulation. This suggests that models of Sender behavior in Complex Trust Games should not assume that participants routinely engage in consequential thinking (CT) of the depth that would be required for utility maximization. Copyright © 2008 John Wiley & Sons, Ltd.