Status and distrust: The relevance of inequality and betrayal aversion

Trust involves a willingness to accept vulnerability, comprised of the risk of being worse off than by not trusting, the risk of being worse off than the trusted party (disadvantageous inequality), and the risk of being betrayed by the trusted party. We examine how people’s status, focusing on sex, race, age and religion, affects their willingness to accept these three risks. We experimentally measure people’s willingness to accept risk in a decision problem, a risky dictator game, and a trust game, and compare responses across games. Groups typically considered having lower status in the US – women, minorities, young adults and non-Protestants – are averse to disadvantageous inequality while higher status groups – men, Caucasians, middle-aged people and Protestants – dislike being betrayed. 2006 Elsevier B.V. All rights reserved. JEL classification: C72; C91 PsycINFO classification: 3020; 2360