Group Identity and Betrayal : Decomposing Trust

Betrayal aversion is an important factor in the decision to trust.Trust in members of one's own social group (ingroup members) is often higher than that in members of other groups (outgroup members). In this paper, I study (i) how betrayal aversion contributes to in-/outgroup discrimination in trust and (ii) how this contribution evolves as social groups solidify. I run two very similar laboratory experiments, first shortly after individuals have been randomly assigned to social groups (outside the laboratory), and seven months later. I find a null result: there is no intergroup discrimination in betrayal aversion, at neither point in time. In the first experiment, betrayal aversion is positive, and does not differ towards in- versus outgroup members. In the second experiment, I find no betrayal aversion. At this time, a subsample of participants trusts ingroup members more, but only in the first of two trusting decisions they make. Factors other than betrayal aversion---such as beliefs about trustworthiness and outcome-based social preferences---seem to explain this ingroup bias in trust. I suggest a couple of potential explanations for the lack of betrayal aversion in the second experiment