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Procedural Concerns

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  • Sebald, Alexander

Abstract

Different to other scientific disciplines traditional economic theory has remained remarkably silent about procedural aspects of strategic interactions. Much to the contrast, among psychologists there is by now a broad consensus that not only expected outcomes shape human behavior, but also procedures that are used to take decisions. It is argued that procedural concerns are especially pervasive in the resolution of conflicts. In our paper we show that procedural concerns are in fact an inherent feature of the interaction of reciprocal agents. More precisely, using Dufwenberg and Kirchsteiger (2004)’s theory of sequential reciprocity we demonstrate that procedural choices determine the responsibility that people have for outcomes. The responsibility for outcomes in turn influences peoples’ evaluations of intentions and, hence, subsequent reactions. Two applications are discussed to highlight the impact and importance of procedural concerns in strategic interactions.

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File URL: http://mpra.ub.uni-muenchen.de/5066/
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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 4508.

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Date of creation: 04 Jun 2007
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Handle: RePEc:pra:mprapa:4508

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Keywords: Psychological Games; Procedural Concerns; Reciprocity;

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References

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  1. Dufwenberg, M. & Kirchsteiger, G., 1998. "A Theory of Sequential Reciprocity," Discussion Paper 1998-37, Tilburg University, Center for Economic Research.
  2. Falk, Armin & Fischbacher, Urs, 2001. "A Theory of Reciprocity," CEPR Discussion Papers 3014, C.E.P.R. Discussion Papers.
  3. Nalebuff, B. & Shubik, M., 1988. "Revenge And Rational Play," Papers 138, Princeton, Woodrow Wilson School - Public and International Affairs.
  4. Michal Krawczyk, 2011. "A model of procedural and distributive fairness," Theory and Decision, Springer, vol. 70(1), pages 111-128, January.
  5. Geanakoplos, John & Pearce, David & Stacchetti, Ennio, 1989. "Psychological games and sequential rationality," Games and Economic Behavior, Elsevier, vol. 1(1), pages 60-79, March.
  6. Pierpaolo Battigalli & Martin Dufwenberg, 2005. "Dynamic Psychological Games," Working Papers 287, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  7. Gary E Bolton & Jordi Brandts & Axel Ockenfels, 2005. "Fair Procedures: Evidence from Games Involving Lotteries," Economic Journal, Royal Economic Society, vol. 115(506), pages 1054-1076, October.
  8. 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.
  9. M. Rabin, 2001. "Incorporating Fairness into Game Theory and Economics," Levine's Working Paper Archive 511, David K. Levine.
  10. Cremer, David De & Knippenberg, Daan van, 2003. "Cooperation with leaders in social dilemmas: On the effects of procedural fairness and outcome favorability in structural cooperation," Organizational Behavior and Human Decision Processes, Elsevier, vol. 91(1), pages 1-11, May.
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Citations

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Cited by:
  1. Michal Krawczyk, 2011. "A model of procedural and distributive fairness," Theory and Decision, Springer, vol. 70(1), pages 111-128, January.
  2. Claude Ménard & Jean-Michel Oudot, 2010. "Opportunisme ou équité ? Le cas des contrats d'approvisionnement de défense," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00624280, HAL.
  3. Ingrid Rohde & Kirsten Rohde, 2011. "Risk attitudes in a social context," Journal of Risk and Uncertainty, Springer, vol. 43(3), pages 205-225, December.
  4. Alexander Sebald & Markus Walzl, 2012. "Optimal contracts based on subjective evaluations and reciprocity," Working Papers 2012-16, Faculty of Economics and Statistics, University of Innsbruck.

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