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Intentions and Social Interactions

  • J. Atsu Amegashie


    (Department of Economics, University of Guelph)

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    In psychological games, higher-order beliefs, emotions, and motives - in addition to actions - affect players’ payoffs. Suppose you are tolerated as opposed to being genuinely accepted by your peers and “friends”. In particular, suppose you are invited to a party, movie, dinner, etc not because your company is desired but because the inviter would feel guilty if she did not invite you. In all of these cases, it is conceivable that the intention behind the action will matter and hence will affect your payoffs. I model intentions in a dynamic non-psychological game under incomplete information. I then modify the game as a standard psychological game in the sense of Geanakoplos, Pearce and Stacchetti (Games and Economic Behavior, 1989) and Rabin (American Economic Review, 1993). I find a complex social interaction in the dynamic psychological equilibrium under incomplete information. In particular, a player may stick to a strategy of accepting every invitation with the goal of discouraging insincere invitations, while in the nonpsychological game this strategy is employed because all invitations are sincere. I discuss how being tolerated but not being truly accepted can explain the rejection of mutually beneficial trades, the choice of identity, social exclusion, marital divorce, and its implication for political correctness and affirmative action.

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    Paper provided by University of Guelph, Department of Economics and Finance in its series Working Papers with number 0602.

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    Length: 21 pages
    Date of creation: 2006
    Date of revision:
    Handle: RePEc:gue:guelph:2006-2
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    1. Colin F. Camerer & Teck-Hua Ho & Juin-Kuan Chong, 2004. "A Cognitive Hierarchy Model of Games," The Quarterly Journal of Economics, Oxford University Press, vol. 119(3), pages 861-898.
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    6. Georg Kirchsteiger & Martin Dufwenberg, 2000. "Reciprocity and wage undercutting," ULB Institutional Repository 2013/5905, ULB -- Universite Libre de Bruxelles.
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    8. Crawford, Vincent P., 2001. "Lying for Strategic Advantage: Rational and Boundedly Rational Misrepresentation of Intentions," University of California at San Diego, Economics Working Paper Series qt6k65014s, Department of Economics, UC San Diego.
    9. J. Atsu Amegashie, 2006. "Economics, Gratitude, and Warm Glow," Working Papers 0601, University of Guelph, Department of Economics and Finance.
    10. Geanakoplos, John & Pearce, David & Stacchetti, Ennio, 1989. "Psychological games and sequential rationality," Games and Economic Behavior, Elsevier, vol. 1(1), pages 60-79, March.
    11. Eyster, Erik & Rabin, Matthew, 2002. "Cursed Equilibrium," Department of Economics, Working Paper Series qt7p2911dn, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    12. Akerlof, George A & Dickens, William T, 1982. "The Economic Consequences of Cognitive Dissonance," American Economic Review, American Economic Association, vol. 72(3), pages 307-19, June.
    13. Werlang, Sérgio Ribeiro da Costa, 1988. "Common knowledge," Economics Working Papers (Ensaios Economicos da EPGE) 118, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    14. Kolpin, Van, 1992. "Equilibrium refinement in psychological games," Games and Economic Behavior, Elsevier, vol. 4(2), pages 218-231, April.
    15. Ruffle, Bradley J., 1999. "Gift giving with emotions," Journal of Economic Behavior & Organization, Elsevier, vol. 39(4), pages 399-420, July.
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