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The limits of guilt

Author

Listed:
  • Loukas Balafoutas

    () (University of Innsbruck)

  • Helena Fornwagner

    (University of Innsbruck)

Abstract

According to the theory of guilt aversion, agents suffer a psychological cost whenever they fall short of other people’s expectations. In this paper, we suggest that there may be limits to this kind of motivation. We present evidence from an experimental dictator game showing that behavior is consistent with guilt aversion for relatively low levels of recipient expectations, roughly up to the point where the recipient expects half of the available surplus. Beyond that point the relationship between expectations and transfers becomes negative. Moreover, we examine this relationship at the individual level and establish a typology of subjects depending on how and whether they condition their behavior on recipient expectations.

Suggested Citation

  • Loukas Balafoutas & Helena Fornwagner, 2017. "The limits of guilt," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 3(2), pages 137-148, December.
  • Handle: RePEc:spr:jesaex:v:3:y:2017:i:2:d:10.1007_s40881-017-0043-0
    DOI: 10.1007/s40881-017-0043-0
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    Cited by:

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    3. Morell, Alexander, 2019. "The short arm of guilt – An experiment on group identity and guilt aversion," Journal of Economic Behavior & Organization, Elsevier, vol. 166(C), pages 332-345.

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    More about this item

    Keywords

    Guilt aversion; Experiment; Strategy method; Expectations;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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