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Surprising Gifts - Theory and Laboratory Evidence

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  • Kiryl Khalmetski
  • Axel Ockenfels
  • Peter Werner

Abstract

People do not only feel guilt from not living up to others' expectations (Battigalli and Dufwenberg (2007)), but may also like to exceed them. We propose a model that generalizes the guilt aversion model to capture the possibility of positive surprises when making gifts. A model extension allows decision makers to care about others' attribution of intentions behind surprises. We test the model in two dictator game experiments. Experiment 1 shows a strong causal effect of recipients' expectations on dictators' transfers. Moreover, in line with our model, the correlation between transfers and expectations can be both, positive and negative, obscuring the effect in the aggregate. Experiment 2 shows that dictators care about what recipients know about the intentions behind surprises.

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Bibliographic Info

Paper provided by University of Cologne, Department of Economics in its series Working Paper Series in Economics with number 61.

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Date of creation: 09 May 2013
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Handle: RePEc:kls:series:0061

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Keywords: guilt aversion; surprise seeking; dictator game; consensus effect;

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  1. Aaron S. Edlin and Chris Shannon., 1995. "Strict Monotonicity in Comparative Statics," Economics Working Papers 95-238, University of California at Berkeley.
  2. 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.
  3. Milgrom, P. & Shannon, C., 1991. "Monotone Comparative Statics," Papers 11, Stanford - Institute for Thoretical Economics.
  4. James Andreoni & B. Douglas Bernheim, 2007. "Social Image and the 50-50 Norm: A Theoretical and Experimental Analysis of Audience Effects," Discussion Papers 07-030, Stanford Institute for Economic Policy Research.
  5. Gerardo A. Guerra & Daniel John Zizzo, 2002. "Trust Responsiveness and Beliefs," Economics Series Working Papers 99, University of Oxford, Department of Economics.
  6. Jason Dana & Roberto Weber & Jason Kuang, 2007. "Exploiting moral wiggle room: experiments demonstrating an illusory preference for fairness," Economic Theory, Springer, vol. 33(1), pages 67-80, October.
  7. Amos Tversky & Daniel Kahneman, 1979. "Prospect Theory: An Analysis of Decision under Risk," Levine's Working Paper Archive 7656, David K. Levine.
  8. Grossman, Zachary, 2010. "Self-Signaling Versus Social-Signaling in Giving," University of California at Santa Barbara, Economics Working Paper Series qt7320x2cp, Department of Economics, UC Santa Barbara.
  9. Selten, Reinhard & Ockenfels, Axel, 1998. "An experimental solidarity game," Journal of Economic Behavior & Organization, Elsevier, vol. 34(4), pages 517-539, March.
  10. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March.
  11. Tversky, Amos & Kahneman, Daniel, 1992. " Advances in Prospect Theory: Cumulative Representation of Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 297-323, October.
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Cited by:
  1. Kiryl Khalmetski, 2013. "The Hidden Value of Lying: Evasion of Guilt in Expert Advice," 2013 Papers pkh266, Job Market Papers.
  2. Giuseppe Attanasi & Pierpaolo Battigalli & Rosemarie Nagel, 2013. "Disclosure of Belief-Dependent Preferences in a Trust Game," Working Papers 506, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.

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