Authors: Uyanga Turmunkh, Martijn J. van den Assem, and Dennie van Dolder [forthcoming, Management Science]
Abstract: We investigate the credibility of non-binding pre-play statements about cooperative behavior, using data from a high-stakes TV game show in which contestants play a variant on the classic Prisoner’s Dilemma. We depart from the conventional binary approach of classifying statements as promises or not, and propose a more fine-grained two-by-two typology inspired by the idea that lying aversion leads defectors to prefer statements that are malleable to ex-post interpretation as truths. Our empirical analysis shows that statements that carry an element of conditionality or implicitness are associated with a lower likelihood of cooperation, and confirms that malleability is a good criterion for judging the predictive power of cheap talk.
Authors: Uyanga Turmunkh, Chen Li, and Peter P. Wakker [forthcoming, Experimental Economics]
Abstract: Decisions to trust are usually decisions under ambiguity (unknown probabilities). For a long time, ambiguity attitudes could be measured only for artificial events (Ellsberg urns or pre-specified probability intervals), and not for natural events such as opponents’ strategy choices. Hence, studies have so far focused on how people’s risk attitudes impact their trust decisions, finding no relations. Recently, a method was introduced of measuring ambiguity attitudes for natural events in individual choice. We extend this method to (trust) games, finding that ambiguity attitudes, unlike risk attitudes, do play a role. We can now also correct measurements of beliefs for ambiguity attitudes. Thus, preference data reveal that introspective survey measures capture trust in the commonly accepted sense of belief in trustworthiness of others. Trustworthy people are more trusting due to their beliefs that others are similar to themselves. In general, this paper shows how the role of ambiguity attitudes in strategic situations can be studied empirically.
Social and Strategic Ambiguity: Betrayal Aversion Revisited
Authors: Uyanga Turmunkh, Chen Li, and Peter P. Wakker [available upon request]
Abstract: This paper uses a new method for measuring ambiguity attitudes to examine the difference in people’s attitudes toward ambiguity in strategic games versus ambiguity generated by “neutral nature.” We identify a new non-strategic component underlying all strategic ambiguities, called social ambiguity. As an application of our new measurement and controls, we resolve some unsettled questions about Bohnet and Zeckhauser’s (2004) finding of betrayal aversion. We show that their findings can be explained by ambiguity aversion rather than betrayal aversion. We confirm the findings of Fetchenhauer and Dunning (2012) who avoided ambiguity and then found no betrayal aversion. Our contribution to their study is that we analyze trust decisions under ambiguity, which is more realistic. In particular, we can investigate how betrayal aversion interacts with ambiguity. We conclude that there is no systematic betrayal aversion.
A Cautionary Tale about Nudges: Evidence from a Natural Field Experiment
Authors: Uyanga Turmunkh, Susanne Neckermann, Dennie van Dolder, and Tong V. Wang [available upon request]