| Abstract: | Decisions are said to be ‘risky’ when they are made in environments with uncertainty caused by nature. By contrast, a decision is said to be ‘trusting’ when its outcome depends on the uncertain decisions of another person. A rapidly expanding literature reveals economically important differences between risky and trusting decisions, and further suggests these differences are due to ‘betrayal aversion’. While its neural foundations have not been previously illuminated, the prevailing hypothesis is that betrayal aversion stems from a desire to avoid negative emotions that arise from learning one''s trust was betrayed. Here, we provide evidence from an fMRI study that supports this hypothesis. In particular, our data indicate that the anterior insula modulates trusting decisions that involve the possibility of betrayal. |
