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The Framing of Games and the Psychology of Strategic Choice

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  • Martin Dufwenberg

    () (University of Arizona)

  • Simon Gaechter

    () (University of Nottingham)

  • Heike Hennig-Schmidt

    () (University of Bonn)

Abstract

Psychological game theory can provide a rational choice explanation of framing effects; frames influence beliefs, and beliefs influence motivations. We explain this point theoretically, and explore its empirical relevance experimentally. In a 2×2-factorial framing design of one-shot public good experiments we show that frames affect subject’s first- and second-order beliefs, and contributions. From a psychological game-theoretic framework we derive two mutually compatible hypotheses about guilt aversion and reciprocity under which contributions are related to second- and first-order beliefs, respectively. Our results are consistent with either.

Suggested Citation

  • Martin Dufwenberg & Simon Gaechter & Heike Hennig-Schmidt, 2006. "The Framing of Games and the Psychology of Strategic Choice," Discussion Papers 2006-20, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  • Handle: RePEc:cdx:dpaper:2006-20
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    Citations

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    Cited by:

    1. Jaromir Kovarik, 2007. "Belief Formation and Evolution in Public Good Games," Labsi Experimental Economics Laboratory University of Siena 016, University of Siena.
    2. Pablo Brañas-Garza & Maria Paz Espinosa, 2011. "Unraveling Public Good Games," Games, MDPI, Open Access Journal, vol. 2(4), pages 1-18, November.
    3. Simon Gächter & Elke Renner, 2010. "The effects of (incentivized) belief elicitation in public goods experiments," Experimental Economics, Springer;Economic Science Association, vol. 13(3), pages 364-377, September.
    4. Balafoutas, Loukas, 2011. "Public beliefs and corruption in a repeated psychological game," Journal of Economic Behavior & Organization, Elsevier, vol. 78(1), pages 51-59.
    5. Cubitt, Robin P. & Drouvelis, Michalis & Gächter, Simon & Kabalin, Ruslan, 2011. "Moral judgments in social dilemmas: How bad is free riding?," Journal of Public Economics, Elsevier, vol. 95(3), pages 253-264.
    6. Simon Gaechter & Benedikt Herrmann & Christian Thöni, 2010. "Culture and Cooperation," CESifo Working Paper Series 3070, CESifo.
      • Simon Gaechter & Benedikt Herrmann & Christian Thoeni, 2010. "Culture and Cooperation," Discussion Papers 2010-09, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
      • Simon Gaechter & Benedikt Herrmann & Christian Thoeni, 2010. "Culture and Cooperation," Discussion Papers 2010-09, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    7. Robin Cubitt & Michalis Drouvelis & Simon Gächter, 2011. "Framing and free riding: emotional responses and punishment in social dilemma games," Experimental Economics, Springer;Economic Science Association, vol. 14(2), pages 254-272, May.
    8. Antonio FILIPPIN & Manuela RAIMONDI, 2009. "Is a public goods experiment like Fight Club? Strategic interaction and the crowding-out effect on altruism," Departmental Working Papers 2009-40, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    9. Güth, Werner & Ploner, Matteo & Regner, Tobias, 2009. "Determinants of in-group bias: Is group affiliation mediated by guilt-aversion?," Journal of Economic Psychology, Elsevier, vol. 30(5), pages 814-827, October.
    10. Simon Gaechter & Benedikt Herrmann, 2008. "Reciprocity, culture, and human cooperation: Previous insights and a new cross-cultural experiment," Discussion Papers 2008-14, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    11. Jordi Brandts & Christiane Schwieren, 2007. "Frames and Games," Lecture Notes in Economics and Mathematical Systems, in: Sobei Hidenori Oda (ed.), Developments on Experimental Economics, pages 175-180, Springer.
    12. Iturbe-Ormaetxe, Iñigo & Ponti, Giovanni & Tomás, Josefa & Ubeda, Luis, 2011. "Framing effects in public goods: Prospect Theory and experimental evidence," Games and Economic Behavior, Elsevier, vol. 72(2), pages 439-447, June.
    13. Philip J. Grossman & Catherine C. Eckel, 2012. "Giving versus Taking: A “Real Donation” Comparison of Warm Glow and Cold Prickle in a Context-Rich Environment," Monash Economics Working Papers 20-12, Monash University, Department of Economics.
    14. Ellingsen, Tore & Johannesson, Magnus & Tjøtta, Sigve & Torsvik, Gaute, 2010. "Testing guilt aversion," Games and Economic Behavior, Elsevier, vol. 68(1), pages 95-107, January.
    15. Cubitt, Robin P. & Drouvelis, Michalis & Gächter, Simon & Kabalin, Ruslan, 2011. "Moral judgments in social dilemmas: How bad is free riding?," Journal of Public Economics, Elsevier, vol. 95(3), pages 253-264.
    16. Goerg, Sebastian J. & Walkowitz, Gari, 2010. "On the prevalence of framing effects across subject-pools in a two-person cooperation game," Journal of Economic Psychology, Elsevier, vol. 31(6), pages 849-859, December.
    17. Philip J. Grossman & Catherine C. Eckel, 2012. "Giving versus Taking: A “Real Donation” Comparison of Warm Glow and Cold Prickle," Monash Economics Working Papers 40-12, Monash University, Department of Economics.
    18. Armin Falk & Urs Fischbacher & Simon Gaechter, 2009. "Living in Two Neighborhoods – Social Interaction Effects in the Lab," Discussion Papers 2009-01, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    19. Nikiforakis, Nikos, 2010. "Feedback, punishment and cooperation in public good experiments," Games and Economic Behavior, Elsevier, vol. 68(2), pages 689-702, March.
    20. Walkowitz, Gari & Goerg, Sebastian J., 2007. "The Janus Face of Cooperation: An Intra- and Cross-Cultural Review," Bonn Econ Discussion Papers 5/2007, University of Bonn, Bonn Graduate School of Economics (BGSE).
    21. Stahl, Dale O. & Haruvy, Ernan, 2008. "Subgame perfection in ultimatum bargaining trees," Games and Economic Behavior, Elsevier, vol. 63(1), pages 292-307, May.

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    More about this item

    Keywords

    Framing; psychological games; guilt aversion; reciprocity; public good games; voluntary cooperation;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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