Your Morals Are Your Moods
AbstractWe test the effect of players' moods on their behavior in a gift-exchange game. In the first stage of the game, player 1 chooses a transfer to player 2. In the second stage, player 2 chooses an effort level. Higher effort is more costly for player 2, but it increases player 1's payoff. We say that player 2 reciprocates if effort is increasing in the transfer received. Player 2 is generous if an effort is incurred even when no transfer is received. Subjects play this game in two different moods. To induce a 'bad mood', subjects in the role of player 2 watched a sad movie before playing the game; to induce a `good mood', they watched a funny movie. Mood induction was effective: subjects who saw the funny movie reported a significantly better mood than those who saw the sad movie. These two moods lead to significant differences in player 2's behavior. We find that a bad mood implies more reciprocity while a good mood implies more generosity. Since high transfers are relatively more common, player 1 makes more money when second movers are in a bad mood.
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Bibliographic InfoPaper provided by Department of Economics, Institute for Business and Economic Research, UC Berkeley in its series Department of Economics, Working Paper Series with number qt5fh525g8.
Date of creation: 01 Jan 2001
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Emotions; motivation; rationality; reciprocity; fairness;
Other versions of this item:
- Georg Kirchsteiger, Luca Rigotti and Aldo Rustichini., 2001. "Your Morals Are Your Moods," Economics Working Papers E01-294Rev, University of California at Berkeley.
- Georg Kirchsteiger & Luca Rigotti & Aldo Rustichini, 2006. "Your Morals are Your Moods," ULB Institutional Repository 2013/149584, ULB -- Universite Libre de Bruxelles.
- Georg Kirchsteiger & Luca Rigotti & Aldo Rustichini, 2001. "Your Morals Are Your Moods," Game Theory and Information 0012005, EconWPA.
- Kirchsteiger, G. & Rigotti, L. & Rustichini, A., 2000. "Your Morals are Your Moods," Discussion Paper 2000-122, Tilburg University, Center for Economic Research.
- C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
- C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
- L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
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