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The limits of guilt

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  • Loukas Balafoutas

    ()

  • Helena Fornwagner

    ()

Abstract

Guilt aversion has been put forward in recent years as a prominent motivation for certain aspects of human behavior. When agents are guilt averse, their utility depends on what they believe others expect of them and they suffer a cost whenever they fall short of those expectations. In this paper we suggest that there may be limits to this kind of motivation. We present evidence from a dictator game showing that dictators display behavior consistent with guilt aversion for relatively low levels of recipient expectations, roughly up to the point where the recipient expects half of the available surplus. Beyond that point the relationship between expectations and transfers becomes negative. We argue that this non-monotonicity can help explain why the economic literature on guilt aversion offers conflicting findings on the relationship between expectations and behavior. Moreover, we examine this relationship at the individual level and establish a typology of subjects depending on how and whether they condition their behavior on recipient expectations. Our evidence is consistent with a simple theoretical model of guilt aversion.

Suggested Citation

  • Loukas Balafoutas & Helena Fornwagner, 2016. "The limits of guilt," Working Papers 2016-09, Faculty of Economics and Statistics, University of Innsbruck.
  • Handle: RePEc:inn:wpaper:2016-09
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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. Pierpaolo Battigalli & Martin Dufwenberg, 2020. "Belief-Dependent Motivations and Psychological Game Theory," CESifo Working Paper Series 8285, CESifo.
    3. 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.
    4. Anastasia Danilov & Kiryl Khalmetski & Dirk Sliwka, 2018. "Norms and Guilt," CESifo Working Paper Series 6999, CESifo.
    5. Morell, Alexander, 2019. "The short arm of guilt – An experiment on group identity and guilt aversion," Journal of Economic Behavior & Organization, Elsevier, vol. 166(C), pages 332-345.

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    More about this item

    Keywords

    guilt aversion; greed; experiment; strategy method;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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