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Your Morals Are Your Moods

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Author Info

  • Georg Kirchsteiger

    (University of Vienna)

  • Luca Rigotti

    (CentER, Tilburg University, & U.C. Berkeley)

  • Aldo Rustichini

    (Boston University & University of Minnesota)

Abstract

We 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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File URL: http://128.118.178.162/eps/game/papers/0012/0012005.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Game Theory and Information with number 0012005.

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Length: 32 pages
Date of creation: 09 Feb 2001
Date of revision:
Handle: RePEc:wpa:wuwpga:0012005

Note: 32 pages, Acrobat .pdf
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Web page: http://128.118.178.162

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  1. Fehr, Ernst & Gachter, Simon, 1998. "Reciprocity and economics: The economic implications of Homo Reciprocans1," European Economic Review, Elsevier, vol. 42(3-5), pages 845-859, May.
  2. Benjamin E. Hermalin & Alice M. Isen, 2000. "The Effect of Affect on Economic and Strategic Decision Making," Econometric Society World Congress 2000 Contributed Papers 1136, Econometric Society.
  3. Ernst Fehr & Klaus M. Schmidt, . "Fairness, Incentives, and Contractual Choices," IEW - Working Papers 020, Institute for Empirical Research in Economics - University of Zurich.
  4. Palomino, F.A. & Rigotti, L. & Rustichini, A., 1998. "Skill, Strategy and Passion: An Empirical Analysis of Soccer," Discussion Paper 1998-129, Tilburg University, Center for Economic Research.
  5. Berg Joyce & Dickhaut John & McCabe Kevin, 1995. "Trust, Reciprocity, and Social History," Games and Economic Behavior, Elsevier, vol. 10(1), pages 122-142, July.
  6. 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.
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Cited by:
  1. Marie Claire Villeval, 2007. "Experimental Economics: Contributions, Recent Developments, and New Challenges," Post-Print halshs-00175179, HAL.
  2. Mónica C. Capra, 2004. "Mood-Driven Behavior in Strategic Interactions," American Economic Review, American Economic Association, vol. 94(2), pages 367-372, May.
  3. Georg Kirchsteiger & Martin Dufwenberg, 2004. "A theory of sequential reciprocity," ULB Institutional Repository 2013/5899, ULB -- Universite Libre de Bruxelles.
  4. Young, H. Peyton, 2009. "Learning by trial and error," Games and Economic Behavior, Elsevier, vol. 65(2), pages 626-643, March.
  5. Danielson, Anders J. & Holm, Hakan J., 2007. "Do you trust your brethren?: Eliciting trust attitudes and trust behavior in a Tanzanian congregation," Journal of Economic Behavior & Organization, Elsevier, vol. 62(2), pages 255-271, February.
  6. Ronald Bosman & Arno Riedl, 2003. "Emotions and Economic Shocks in a First-Price Auction," Tinbergen Institute Discussion Papers 03-056/1, Tinbergen Institute.

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