Humans’ (Incorrect) Distrust of Reflective Decisions

33 Pages Posted: 22 Mar 2017 Last revised: 26 May 2017

See all articles by Antonio Cabrales

Antonio Cabrales

University College London - Department of Economics

Antonio Espín

University of Granada

Praveen Kujal

Middlesex University

Stephen Rassenti

Economic Science Institute, Chapman University

Date Written: May 26, 2017

Abstract

Human decision making in the social domain is modulated by the interaction between fast (intuitive) and slow (reflective) processes. Forcing individuals to decide quickly, versus slowly, is likely to elicit different social behaviors. Similarly, individual choices may also depend on the time others’ have for decision making. This aspect of human behavior, i.e., whether individuals can predict how external time constraints affect others’ behavior, remains poorly understood. Here, we study a canonical example of social interaction where predicting others’ responses is crucial. We conduct a Trust Game experiment in which the trustor, by sending an amount of money to the trustee, runs the risk of being exploited by the trustee’s subsequent action. We analyze whether individuals are more willing to trust someone who is forced to respond quickly (intuitively) or slowly (reflectively). Our data provide strong evidence that an individual’s first intuition is to distrust reflective decisions; we also find evidence that this inclination is not optimal. Even if it leads to the desired behavior, forcing decision makers to stop and reflect (e.g., by imposing cooling-off periods in negotiations or stock-market trading) may result in substantial efficiency losses due to other parties’ incorrect intuitive beliefs.

Keywords: trust, trustworthiness, beliefs, reflection, dual-process, intuition

Suggested Citation

Cabrales, Antonio and Espín, Antonio and Kujal, Praveen and Rassenti, Stephen, Humans’ (Incorrect) Distrust of Reflective Decisions (May 26, 2017). Available at SSRN: https://ssrn.com/abstract=2938434 or http://dx.doi.org/10.2139/ssrn.2938434

Antonio Cabrales

University College London - Department of Economics ( email )

Drayton House, 30 Gordon Street
30 Gordon Street
London, WC1H 0AX
United Kingdom

Antonio Espín (Contact Author)

University of Granada ( email )

Campus de Cartuja S/N
Granada, Granada 18071
Spain

Praveen Kujal

Middlesex University ( email )

The Burroughs
London, NW4 4BT
United Kingdom

Stephen Rassenti

Economic Science Institute, Chapman University ( email )

One University Drive
Wilkinson Hall 104
Orange, CA 92866
United States
714-628-2802 (Phone)

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