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Public goods games and psychological utility: Theory and evidence

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  • Sanjit Dhami
  • Mengxing Wei
  • Ali al-Nowaihi

Abstract

We consider a public goods game which incorporates guilt-aversion/surprise- seeking and the attribution of intentions behind these emotions (Battigalli and Dufwenberg, 2007; Khalmetski et al., 2015). We implement the induced beliefs method (Ellingsen et al., 2010) and a within-subjects design using the strategy method. Previous studies mainly use dictator games - whose results may not be robust to adding strategic components. We …nd that guilt-aversion is far more important than surprise-seeking; and that the attribution of intentions behind guilt- aversion/surprise-seeking is important. Our between-subjects analysis confirms the results of the within-subjects design.

Suggested Citation

  • Sanjit Dhami & Mengxing Wei & Ali al-Nowaihi, 2016. "Public goods games and psychological utility: Theory and evidence," Discussion Papers in Economics 16/17, Division of Economics, School of Business, University of Leicester.
  • Handle: RePEc:lec:leecon:16/17
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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. Caria, A. Stefano & Fafchamps, Marcel, 2019. "Expectations, network centrality, and public good contributions: Experimental evidence from India," Journal of Economic Behavior & Organization, Elsevier, vol. 167(C), pages 391-408.
    3. Kozlovskaya, Maria & Nicoló, Antonio, 2019. "Public good provision mechanisms and reciprocity," Journal of Economic Behavior & Organization, Elsevier, vol. 167(C), pages 235-244.
    4. Sanjit Dhami & Junaid Arshad & Ali al-Nowaihi, 2019. "Psychological and Social Motivations in Microfinance Contracts: Theory and Evidence," CESifo Working Paper Series 7773, CESifo.
    5. Pierpaolo Battigalli & Martin Dufwenberg, 2020. "Belief-Dependent Motivations and Psychological Game Theory," CESifo Working Paper Series 8285, CESifo.
    6. Sanjit Dhami & Emma Manifold & Ali al‐Nowaihi, 2021. "Identity and Redistribution: Theory and Evidence," Economica, London School of Economics and Political Science, vol. 88(350), pages 499-531, April.
    7. Giuseppe Attanasi & Claire Rimbaud & Marie Claire Villeval, 2022. "Guilt Aversion in (New) Games:Does Partners’ Vulnerability Matter?," Working Papers 2203, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    8. Peeters, Ronald & Vorsatz, Marc, 2021. "Simple guilt and cooperation," Journal of Economic Psychology, Elsevier, vol. 82(C).
    9. Cartwright, Edward, 2019. "A survey of belief-based guilt aversion in trust and dictator games," Journal of Economic Behavior & Organization, Elsevier, vol. 167(C), pages 430-444.
    10. Beinhocker, Eric & Dhami, Sanjit, 2019. "The Behavioral Foundations of New Economic Thinking," INET Oxford Working Papers 2019-13, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.
    11. Khalmetski, Kiryl, 2019. "Evasion of guilt in expert advice," Journal of Economic Behavior & Organization, Elsevier, vol. 167(C), pages 296-310.
    12. Sanjit Dhami & Mengxing Wei & Ali al-Nowaihi, 2021. "Classical and Belief-Based Gift Exchange Models: Theory and Evidence," CESifo Working Paper Series 8992, CESifo.
    13. Patel, Amrish & Smith, Alec, 2019. "Guilt and participation," Journal of Economic Behavior & Organization, Elsevier, vol. 167(C), pages 279-295.

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    More about this item

    Keywords

    Public goods games; psychological game theory; surprise-seeking/guilt- aversion; attribution of intentions; induced beliefs method; strategy method; within- subjects design.;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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