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Surprising Gifts - Theory and Laboratory Evidence

Listed author(s):
  • Kiryl Khalmetski
  • Axel Ockenfels
  • Peter Werner

People do not only feel guilt from not living up to others' expectations (Battigalli and Dufwenberg (2007)), but may also like to exceed them. We propose a model that generalizes the guilt aversion model to capture the possibility of positive surprises when making gifts. A model extension allows decision makers to care about others' attribution of intentions behind surprises. We test the model in two dictator game experiments. Experiment 1 shows a strong causal effect of recipients' expectations on dictators' transfers. Moreover, in line with our model, the correlation between transfers and expectations can be both, positive and negative, obscuring the effect in the aggregate. Experiment 2 shows that dictators care about what recipients know about the intentions behind surprises.

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Paper provided by University of Cologne, Department of Economics in its series Working Paper Series in Economics with number 61.

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Date of creation: 09 May 2013
Handle: RePEc:kls:series:0061
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