Learning about a Class of Belief-Dependent Preferences without Information on Beliefs
AbstractWe show how to bound the effect of belief-dependent preferences on choices in sequential two-player games without information about the (higher-order) beliefs of players. The approach can be applied to a class of belief-dependent preferences which includes reciprocity (Dufwenberg and Kirchsteiger, 2004) and guilt aversion (Battigalli and Dufwenberg, 2007) as special cases. We show how the size of the bounds can be substantially reduced by exploiting a specific invariance property common to preferences in this class. We illustrate our approach by analyzing data from a large scale experiment conducted with a sample of participants randomly drawn from the Dutch population. We find that behavior of players in the experiment is consistent with significant guilt aversion: some groups of the population are willing to pay at least 0.16e to avoid 'letting down' another player by 1e. We also find that our approach produces narrow and thus very informative bounds on the effect of reciprocity in the games we consider. Our bounds suggest the model of reciprocity we consider is not a significant determinant of decisions in our experiment.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5957.
Length: 34 pages
Date of creation: Sep 2011
Date of revision:
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Other versions of this item:
- Charles Bellemare & Alexander Sebald, 2011. "Learning about a Class of Belief-Dependent Preferences without Information on Beliefs," Cahiers de recherche 1125, CIRPEE.
- C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-09-22 (All new papers)
- NEP-CBE-2011-09-22 (Cognitive & Behavioural Economics)
- NEP-EVO-2011-09-22 (Evolutionary Economics)
- NEP-EXP-2011-09-22 (Experimental Economics)
- NEP-UPT-2011-09-22 (Utility Models & Prospect Theory)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bellemare, Charles & Sebald, Alexander & Strobel, Martin, 2010.
"Measuring the Willingness to Pay to Avoid Guilt: Estimation Using Equilibrium and Stated Belief Models,"
IZA Discussion Papers
4803, Institute for the Study of Labor (IZA).
- Charles Bellemare & Alexander Sebald & Martin Strobel, 2011. "Measuring the willingness to pay to avoid guilt: estimation using equilibrium and stated belief models," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 26(3), pages 437-453, 04.
- Charles Bellemare & Alexander Sebald & Martin Strobel, 2010. "Measuring the Willingness to Pay to Avoid Guilt: Estimation using Equilibrium and Stated Belief Models," Discussion Papers 10-08, University of Copenhagen. Department of Economics.
- Charles Bellemare & Alexander Sebald & Martin Strobel, 2010. "Measuring the Willingness to Pay to Avoid Guilt: Estimation using Equilibrium ad Stated Belief Models," Cahiers de recherche 1011, CIRPEE.
- Victor Chernozhukov & Sokbae 'Simon' Lee & Adam Rosen, 2012.
"Intersection bounds: estimation and inference,"
CeMMAP working papers
CWP33/12, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
- Victor Chernozhukov & Sokbae 'Simon' Lee & Adam Rosen, 2009. "Intersection Bounds: estimation and inference," CeMMAP working papers CWP19/09, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
- Victor Chernozhukov & Sokbae 'Simon' Lee & Adam Rosen, 2011. "Intersection bounds: estimation and inference," CeMMAP working papers CWP34/11, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
- Charles Bellemare & Sabine Kröger & Arthur van Soest, 2008.
"Measuring Inequity Aversion in a Heterogeneous Population Using Experimental Decisions and Subjective Probabilities,"
Econometric Society, vol. 76(4), pages 815-839, 07.
- Bellemare, C. & Kroger, S. & Soest, A.H.O. van, 2008. "Measuring inequity aversion in a heterogeneous population using experimental decisions and subjective probabilities," Open Access publications from Tilburg University urn:nbn:nl:ui:12-376716, Tilburg University.
- Bellemare, C. & Kroger, S., 2004.
"On Representative Social Capital,"
2004-57, Tilburg University, Center for Economic Research.
- Bellemare, Charles & Kröger, Sabine, 2004. "On Representative Social Capital," IZA Discussion Papers 1145, Institute for the Study of Labor (IZA).
- Charles Bellemare & Sabine Kroger, 2005. "On representative social capital," Artefactual Field Experiments 00006, The Field Experiments Website.
- Bellemare, Charles & Kröger, Sabine, 2003. "On Representative Trust," SFB 373 Discussion Papers 2003,27, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
- Bellemare, C. & Kroger, S., 2003. "On Representative Trust," Discussion Paper 2003-47, Tilburg University, Center for Economic Research.
- Charles Bellemare & Sabine Kroger, 2005. "On Representative Social Capital," Cahiers de recherche 0504, CIRPEE.
- Dhaene, Geert & Bouckaert, Jan, 2010.
"Sequential reciprocity in two-player, two-stage games: An experimental analysis,"
Games and Economic Behavior,
Elsevier, vol. 70(2), pages 289-303, November.
- Dhaene G. & Bouckaert J., 2007. "Sequential Reciprocity in Two-Player, Two-Stage Games: An Experimental Analysis," Working Papers 2007026, University of Antwerp, Faculty of Applied Economics.
- Geert Dhaene & Jan Bouckaert, 2007. "Sequential reciprocity in two-player, two-stages games: an experimental analysis," Center for Economic Studies - Discussion papers ces0717, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
- Pierpaolo Battigalli & Martin Dufwenberg, 2007. "Guilt in Games," American Economic Review, American Economic Association, vol. 97(2), pages 170-176, May.
- Charles Bellemare & Luc Bissonnette & Sabine Kröger, 2010.
"Bounding Preference Parameters under Different Assumptions about Beliefs: a Partial Identification Approach,"
Cahiers de recherche
- Charles Bellemare & Luc Bissonnette & Sabine Kröger, 2010. "Bounding preference parameters under different assumptions about beliefs: a partial identification approach," Experimental Economics, Springer, vol. 13(3), pages 334-345, September.
- Andrew Chesher, 2009. "Single equation endogenous binary reponse models," CeMMAP working papers CWP23/09, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
- Blanco, Mariana & Engelmann, Dirk & Koch, Alexander K. & Normann, Hans-Theo, 2009. "Preferences and Beliefs in a Sequential Social Dilemma: A Within-Subjects Analysis," IZA Discussion Papers 4624, Institute for the Study of Labor (IZA).
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