Incomplete Information Models of Guilt Aversion in the Trust Game
AbstractIn the theory of psychological games it is assumed that players' preferences on material consequences depend on endogenous beliefs. Most of the applications of this theoretical framework assume that the psychological utility functions representing such preferences are common knowledge. But this is often unrealistic. In particular, it cannot be true in experimental games where players are subjects drawn at random from a population. Therefore an incomplete-information methodology is called for. We take a first step in this direction, focusing on models of guilt aversion in the Trust Game. We consider two alternative modeling assumptions: (i) guilt aversion depends on the role played in the game, because only the trustee can feel guilt for letting the co-player down, (ii) guilt aversion is independent of the role played in the game. We show how the set of Bayesian equilibria changes as the upper bound on guilt sensitivity varies, and we compare this with the complete-information case. Our analysis illustrates the incomplete-information approach to psychological games and can help organize experimental results in the Trust Game.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University of Milano-Bicocca, Department of Economics in its series Working Papers with number 246.
Date of creation: Jun 2013
Date of revision: Jun 2013
Psychological games; Trust Game; guilt; incomplete information;
Other versions of this item:
- Giuseppe Attanasi & Pierpaolo Battigalli & Elena Manzoni, 2013. "Incomplete Information Models of Guilt Aversion in the Trust Game," Working Papers 480, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- D03 - Microeconomics - - General - - - Behavioral Economics; Underlying Principles
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-06-09 (All new papers)
- NEP-CBE-2013-06-09 (Cognitive & Behavioural Economics)
- NEP-CTA-2013-06-09 (Contract Theory & Applications)
- NEP-EVO-2013-06-09 (Evolutionary Economics)
- NEP-EXP-2013-06-09 (Experimental Economics)
- NEP-GTH-2013-06-09 (Game Theory)
- NEP-HPE-2013-06-09 (History & Philosophy of Economics)
- NEP-MIC-2013-06-09 (Microeconomics)
- NEP-ORE-2013-06-09 (Operations Research)
- NEP-SOC-2013-06-09 (Social Norms & Social Capital)
- NEP-UPT-2013-06-09 (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.:
- Simon Gaechter & Daniele Nosenzo & Elke Renner & Martin Sefton, 2009.
"Who Makes A Good Leader? Cooperativeness, Optimism And Leading-By-Example,"
2009-19, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
- Simon Gächter & Daniele Nosenzo & Elke Renner & Martin Sefton, 2012. "Who Makes A Good Leader? Cooperativeness, Optimism, And Leading-By-Example," Economic Inquiry, Western Economic Association International, vol. 50(4), pages 953-967, October.
- Simon Gaechter & Daniele Nosenzo & Elke Renner & Martin Sefton, 2009. "Who Makes A Good Leader? Cooperativeness, Optimism And Leading-By-Example," Discussion Papers 2009-19, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
- ATTANASI Giuseppe & NAGEL Rosemarie, 2008. "A Survey of Psychological Games: Theoretical Findings and Experimental Evidence," LERNA Working Papers 08.07.251, LERNA, University of Toulouse.
- Guerra, Gerardo & John Zizzo, Daniel, 2004.
"Trust responsiveness and beliefs,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 55(1), pages 25-30, September.
- Andrew Caplin & John Leahy, 2004.
"The supply of information by a concerned expert,"
Royal Economic Society, vol. 114(497), pages 487-505, 07.
- Uri Gneezy, 2005. "Deception: The Role of Consequences," American Economic Review, American Economic Association, vol. 95(1), pages 384-394, March.
- Christoph Vanberg, 2008. "Why Do People Keep Their Promises? An Experimental Test of Two Explanations -super-1," Econometrica, Econometric Society, vol. 76(6), pages 1467-1480, November.
- 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 ad Stated Belief Models," Cahiers de recherche 1011, CIRPEE.
- 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.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roberto Reale).
If references are entirely missing, you can add them using this form.