Experimental Design
The experiment is based on a modified trust game in which all participants act as trustors and are matched with separately recruited trustees. Each trustor chooses between a no-trust option, in which they keep 5 dollars and allocate 5 dollars to the trustee, and a trust option, in which they keep 2 dollars and send 8 dollars to the trustee. The 8 dollars is tripled to 24 dollars, after which the trustee decides how much to return.
Before making the trust decision, participants report how happy they would feel if trust is reciprocated and how disappointed they would feel if trust is not reciprocated, each at one of three intensity levels: slightly, moderately, or very. Participants are then randomly assigned to one of four conditions. In the control condition, no emotional message is sent to the trustee. In the negative-valence treatment, participants are told that if they choose trust, the trustee will see a message stating how disappointed they would feel if the trustee does not reciprocate their trust, before the trustee decides how much to return. Participants are asked to choose the intensity of that message. In the positive-valence treatment, participants are told that if they choose trust, the trustee will see a message stating how happy they would feel if the trustee reciprocates their trust, and participants choose the intensity. In the free-valence treatment, participants are allowed to choose both whether to reveal happiness or disappointment and the intensity of the chosen emotion.
After the trust decision, all participants complete a bi-section choice task, based on the belief-hedge method introduced by Baillon et al. (2018, 2021). Participants make decisions between ambiguous and risky options. The probability in the risky option is varied until indifference is reached within a pre-determined error margin. These choice situations are designed to elicit the matching probability associated with events concerning the trustee's return amount. The resulting matching probabilities allow us to construct three indexes: (i) an ambiguity-aversion index, capturing aversion to ambiguity about the trustee's return amount; (ii) an ambiguity-insensitivity index, capturing how precisely or imprecisely participants perceive this uncertainty; and (iii) an expected return amount, reflecting participants’ beliefs about how much they expect to receive from the trustee.