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Belief-dependent Preferences and Reputation: Experimental Analysis of a Repeated Trust Game

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  • Giuseppe Attanasi
  • Pierpaolo Battigalli
  • Elena Manzoni
  • Rosemarie Nagel

Abstract

We study in a theoretical and experimental setting the interaction between belief-dependent preferences and reputation building in a nitely repeated trust game. We focus mainly on the effect of guilt aversion. In a simple two-types model, we analyze the effect of reputation building in presence of guilt-averse players and derive behavioral predictions. In the experiment, we elicit information on trustees? belief-dependent preferences and disclose it to the paired trustor before the repeated game. Our ex- perimental results show that disclosing information on the trustee?s belief-dependent preferences and thus letting players play the repeated trust game in presence of almost complete information leads to higher trust and cooperation than in the corresponding incomplete information game setting. In particular, disclosure of information on preferences of guilt-averse trustees also enhances the trustors?cooperation. Disclosure of information on belief-dependent preferences of reciprocity-concerned trustees, instead, does not lead to higher trust and cooperation. We show that this is theoretically consistent with subjects featuring low reciprocity concerns. JEL classifi?cation: C72; C73; C91. Keywords: Repeated psychological game; reputation; guilt; reciprocity; almost complete information.

Suggested Citation

  • Giuseppe Attanasi & Pierpaolo Battigalli & Elena Manzoni & Rosemarie Nagel, 2018. "Belief-dependent Preferences and Reputation: Experimental Analysis of a Repeated Trust Game," Working Papers 622, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  • Handle: RePEc:igi:igierp:622
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Attanasi, Giuseppe & Rimbaud, Claire & Villeval, Marie Claire, 2019. "Embezzlement and guilt aversion," Journal of Economic Behavior & Organization, Elsevier, vol. 167(C), pages 409-429.
    2. Giuseppe Attanasi & Kene Boun My & Nikolaos Georgantzís & Miguel Ginés, 2019. "Strategic Ethics: Altruism without the Other-Regarding Confound," Revue économique, Presses de Sciences-Po, vol. 70(6), pages 967-998.
    3. Kaiming Zheng & Xiaoyuan Wang & Debing Ni & Yang Yang, 2020. "Reciprocity and Veto Power in Relation-Specific Investments: An Experimental Study," Sustainability, MDPI, Open Access Journal, vol. 12(10), pages 1-1, May.
    4. Khalmetski, Kiryl, 2019. "Evasion of guilt in expert advice," Journal of Economic Behavior & Organization, Elsevier, vol. 167(C), pages 296-310.
    5. Pierpaolo Battigalli & Martin Dufwenberg, 2019. "Psychological Game Theory," Working Papers 646, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    6. Pierpaolo Battigalli & Martin Dufwenberg, 2020. "Belief-Dependent Motivations and Psychological Game Theory," CESifo Working Paper Series 8285, CESifo.
    7. Matthias Greiff, 2019. "Team Production and Esteem: A Dual Selves Model with Belief-Dependent Preferences," Games, MDPI, Open Access Journal, vol. 10(3), pages 1-1, August.
    8. Dhami, Sanjit & Wei, Mengxing & al-Nowaihi, Ali, 2019. "Public goods games and psychological utility: Theory and evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 167(C), pages 361-390.
    9. Giuseppe Attanasi & Claire Rimbaud & Marie-Claire Villeval, 2020. "Guilt Aversion in (New) Games: the Role of Vulnerability," GREDEG Working Papers 2020-15, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    10. Pierpaolo Battigalli & Roberto Corrao & Martin Dufwenberg, 2019. "Incorporating Belief-Dependent Motivation in Games Psychological game theory (PGT), introduced by Geanakoplos, Pearce & Stacchetti (1989) and significantly generalized by Battigalli & Dufwenberg (2009," Working Papers 642, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    11. Battigalli, Pierpaolo & Corrao, Roberto & Dufwenberg, Martin, 2019. "Incorporating belief-dependent motivation in games," Journal of Economic Behavior & Organization, Elsevier, vol. 167(C), pages 185-218.

    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
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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