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Disclosure of Belief-Dependent Preferences in a Trust Game

Listed author(s):
  • Giuseppe Attanasi
  • Pierpaolo Battigalli
  • Rosemarie Nagel

Experimental evidence suggests that agents in social dilemmas have belief-dependent, other-regarding preferences. But in experimental games such preferences cannot be common knowledge, because subjects play with anonymous co-players. We address this issue theoretically and experimentally in the context of a trust game, assuming that the trustee’s choice may be affected by a combination of guilt aversion and intention-based reciprocity. We recover trustees’ belief-dependent preferences from their answers to a structured questionnaire. In the main treatment, the answers are disclosed and made common knowledge within each matched pair, while in the control treatment there is no disclosure. Our main auxiliary assumption is that such disclosure approximately implements a psychological game with complete information. To organize the data, we classify subjects according to their elicited preferences, and test predictions for the two treatments using both rationalizability and equilibrium. We find that guilt aversion is the prevalent psychological motivation, and that behavior and elicited beliefs move in the direction predicted by the theory. JEL classification: C72, C91, D03. Keywords: Experiments, trust game, guilt, reciprocity, complete and incomplete information.

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Paper provided by IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University in its series Working Papers with number 506.

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Date of creation: 2013
Handle: RePEc:igi:igierp:506
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  1. Luca Stanca & Luigino Bruni & Luca Corazzini, 2007. "Testing Theories of Reciprocity: Do Motivations Matter?," Working Papers 109, University of Milano-Bicocca, Department of Economics, revised 2007.
  2. Werner, Peter & Khalmetski, Kiryl & Ockenfels, Axel, 2015. "Surprising Gifts: Theory and Laboratory Evidence," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113006, Verein für Socialpolitik / German Economic Association.
  3. Gerardo A. Guerra & Daniel John Zizzo, 2002. "Trust Responsiveness and Beliefs," Economics Series Working Papers 99, University of Oxford, Department of Economics.
  4. M. Rabin, 2001. "Incorporating Fairness into Game Theory and Economics," Levine's Working Paper Archive 511, David K. Levine.
  5. Camelia M. Kuhnen & Agnieszka Tymula, 2012. "Feedback, Self-Esteem, and Performance in Organizations," Management Science, INFORMS, vol. 58(1), pages 94-113, January.
  6. Charles Bellemare & Alexander Sebald & Martin Strobel, 2010. "Measuring the Willingness to Pay to Avoid Guilt: Estimation using Equilibrium ad Stated Belief Models," Cahiers de recherche 1011, CIRPEE.
  7. Cox, James C., 2004. "How to identify trust and reciprocity," Games and Economic Behavior, Elsevier, vol. 46(2), pages 260-281, February.
  8. Berg Joyce & Dickhaut John & McCabe Kevin, 1995. "Trust, Reciprocity, and Social History," Games and Economic Behavior, Elsevier, vol. 10(1), pages 122-142, July.
  9. Dufwenberg, Martin, 2002. "Marital investments, time consistency and emotions," Journal of Economic Behavior & Organization, Elsevier, vol. 48(1), pages 57-69, May.
  10. Christoph Vanberg, 2008. "Why Do People Keep Their Promises? An Experimental Test of Two Explanations -super-1," Econometrica, Econometric Society, vol. 76(6), pages 1467-1480, November.
  11. Michael Bacharach & Gerardo Guerra & Daniel Zizzo, 2007. "The Self-Fulfilling Property of Trust: An Experimental Study," Theory and Decision, Springer, vol. 63(4), pages 349-388, December.
  12. Falk, Armin & Fehr, Ernst & Fischbacher, Urs, 2008. "Testing theories of fairness--Intentions matter," Games and Economic Behavior, Elsevier, vol. 62(1), pages 287-303, January.
  13. Giuseppe Attanasi & Pierpaolo Battigalli & Elena Manzoni, 2013. "Incomplete Information Models of Guilt Aversion in the Trust Game," Working Papers 480, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  14. ATTANASI Giuseppe & NAGEL Rosemarie, 2008. "A Survey of Psychological Games: Theoretical Findings and Experimental Evidence," LERNA Working Papers 08.07.251, LERNA, University of Toulouse.
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