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.

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Sacrifice is widely believed to enhance cooperation in churches, communes, gangs, clans, military units, and many other groups. We find that sacrifice can also work in the lab, apart from special ideologies, identities, or interactions. Our subjects play a modified VCM game—one in which they can voluntarily join groups that provide reduced rates of return on private investment. This leads to both endogenous sorting (because free-riders tend to reject the reduced-rate option) and substitution (because reduced private productivity favours increased club involvement). Seemingly unproductive costs thus serve to screen out free-riders, attract conditional cooperators, boost club production, and increase member welfare. The sacrifice mechanism is simple and particularly useful where monitoring difficulties impede punishment, exclusion, fees, and other more standard solutions.

The clinical diagnosis and symptoms of major depressive disorder (MDD) have been closely associated with impairments in reward processing. In particular, various studies have shown blunted neural and behavioral responses to the experience of reward in depression. However, little is known about whether depression affects individuals’ valuation of potential rewards during decision-making, independent from reward experience. To address this question, we used a gambling task and a model-based analytic approach to measure two types of individual sensitivity to reward values in participants with MDD: ‘risk preference,’ indicating how objective values are subjectively perceived, and ‘inverse temperature,’ determining the degree to which subjective value differences between options influence participants’ choices. On both of these measures of value sensitivity, participants with MDD were comparable to non-psychiatric controls. In addition, both risk preference and inverse temperature were stable over four laboratory visits and comparable between the groups at each visit. Neither valuation measure varied with severity of clinical symptoms in MDD. These data suggest intact and stable value processing in MDD during risky decision-making.