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Belief-dependent preferences and reputation: Experimental analysis of a repeated trust game

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  • Giuseppe Attanasi

    () (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS - Centre National de la Recherche Scientifique - UNS - Université Nice Sophia Antipolis - UCA - Université Côte d'Azur)

  • Pierpaolo Battigalli

    (Bocconi University & IGIER)

  • Elena Manzoni

    (UNIMIB - Università degli Studi di Milano-Bicocca [Milano])

  • Rosemarie Nagel

    (Universitat Pompeu Fabra [Barcelona], ICREA - Institució Catalana de Recerca i Estudis Avançats)

Abstract

We study in a theoretical and experimental setting the interaction between belief-dependent preferences and reputation building in a finitely repeated trust game. We focus mainly on the effect of guilt aversion. In a simple two-type model, we analyze the effect of reputation building in the presence of guilt-averse trustees and derive behavioral predictions. We test these predictions in a laboratory experiment where we elicit information on trustees' belief-dependent preferences and disclose it to the paired trustor before the repeated game.

Suggested Citation

  • Giuseppe Attanasi & Pierpaolo Battigalli & Elena Manzoni & Rosemarie Nagel, 2019. "Belief-dependent preferences and reputation: Experimental analysis of a repeated trust game," Post-Print halshs-01948364, HAL.
  • Handle: RePEc:hal:journl:halshs-01948364
    DOI: 10.1016/j.jebo.2018.12.002
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01948364
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    References listed on IDEAS

    as
    1. Balafoutas, Loukas, 2011. "Public beliefs and corruption in a repeated psychological game," Journal of Economic Behavior & Organization, Elsevier, vol. 78(1-2), pages 51-59, April.
    2. Kreps, David M. & Milgrom, Paul & Roberts, John & Wilson, Robert, 1982. "Rational cooperation in the finitely repeated prisoners' dilemma," Journal of Economic Theory, Elsevier, vol. 27(2), pages 245-252, August.
    3. John H. Kagel & Alvin E. Roth, 2016. "The Handbook of Experimental Economics, Volume 2," Economics Books, Princeton University Press, edition 1, volume 2, number 10874.
    4. repec:eee:gamebe:v:106:y:2017:i:c:p:161-178 is not listed on IDEAS
    5. Giuseppe Attanasi & Pierpaolo Battigalli & Rosemarie Nagel, 2013. "Disclosure of Belief-Dependent Preferences in a Trust Game," Working Papers 506, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    6. Ederer, Florian & Stremitzer, Alexander, 2017. "Promises and expectations," Games and Economic Behavior, Elsevier, vol. 106(C), pages 161-178.
    7. Giuseppe Attanasi & Pierpaolo Battigalli & Elena Manzoni, 2016. "Incomplete-Information Models of Guilt Aversion in the Trust Game," Management Science, INFORMS, vol. 62(3), pages 648-667, March.
    8. Dufwenberg, Martin & Kirchsteiger, Georg, 2004. "A theory of sequential reciprocity," Games and Economic Behavior, Elsevier, vol. 47(2), pages 268-298, May.
    9. Chiara Aina & Pierpaolo Battigalli & Astrid Gamba, 2018. "Frustration and Anger in the Ultimatum Game: An Experiment," Working Papers 621, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    10. Kreps, David M. & Wilson, Robert, 1982. "Reputation and imperfect information," Journal of Economic Theory, Elsevier, vol. 27(2), pages 253-279, August.
    11. Engle-Warnick, Jim & Slonim, Robert L., 2004. "The evolution of strategies in a repeated trust game," Journal of Economic Behavior & Organization, Elsevier, vol. 55(4), pages 553-573, December.
    12. Milgrom, Paul & Roberts, John, 1982. "Predation, reputation, and entry deterrence," Journal of Economic Theory, Elsevier, vol. 27(2), pages 280-312, August.
    13. Mailath, George J. & Samuelson, Larry, 2006. "Repeated Games and Reputations: Long-Run Relationships," OUP Catalogue, Oxford University Press, number 9780195300796.
    14. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
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    Cited by:

    1. Attanasi, Giuseppe & Rimbaud, Claire & Villeval, Marie Claire, 2018. "Embezzlement and Guilt Aversion," IZA Discussion Papers 11956, Institute of Labor Economics (IZA).
    2. Giuseppe Attanasi & Kene Boun My & Nikolaos Georgantzís & Miguel Ginés, 2019. "Strategic Ethics: Altruism without the Other-regarding Confound," GREDEG Working Papers 2019-13, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis.
    3. Pierpaolo Battigalli & Roberto Corrao & Martin Dufwenberg, 2019. "Incorporating Belief-Dependent Motivation in Games," Working Papers 642, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    4. Pierpaolo Battigalli & Martin Dufwenberg, 2019. "Psychological Game Theory," Working Papers 646, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.

    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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