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Predictable and predictive emotions: explaining cheap signals and trust re-extension.

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  • 1Economic Science Institute, Chapman University Orange, CA, USA.

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Strangers build trust in economic exchanges, even after breaches, using communication like promises and apologies. Emotions play a key role in regulating trust, apologies, and re-extending trust.

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Area of Science:

  • Behavioral Economics
  • Social Psychology
  • Game Theory

Background:

  • Unrelated strangers often establish trust for economic gains, defying traditional predictions.
  • Cheap communication signals, like promises and apologies, facilitate trust re-extension even after breaches.

Purpose of the Study:

  • Investigate the role of emotions in regulating trust-related behaviors.
  • Examine how emotions influence messaging, apologies, and trust re-extension in economic games.
  • Understand the endogenous emergence and regulation of trust and trustworthiness.

Main Methods:

  • Utilized a pair of trust games with one-way communication.
  • Incorporated an emotion survey to assess participants' emotional states.
  • Observed the natural distribution of trust behaviors and remedial strategies.

Main Results:

  • Emotions triggered by interaction outcomes are predictable.
  • Emotions significantly predict subsequent apology and trust re-extension.
  • Communication strategies, particularly apologies, effectively encourage trust re-extension.

Conclusions:

  • Emotions are crucial in regulating trust and trustworthiness in economic interactions.
  • Understanding emotional responses explains the effectiveness of communication and trust repair.
  • This research provides insights into the psychological underpinnings of economic cooperation.