Incomplete Information Models of Guilt Aversion in the Trust Game
In the theory of psychological games it is assumed that players' preferences on material consequences depend on endogenous beliefs. Most of the applications of this theoretical framework assume that the psychological utility functions representing such preferences are common knowledge. But this is often unrealistic. In particular, it cannot be true in experimental games where players are subjects drawn at random from a population. Therefore an incomplete-information methodology is called for. We take a first step in this direction, focusing on models of guilt aversion in the Trust Game. We consider two alternative modeling assumptions: (i) guilt aversion depends on the role played in the game, because only the trustee can feel guilt for letting the co-player down, (ii) guilt aversion is independent of the role played in the game. We show how the set of Bayesian equilibria changes as the upper bound on guilt sensitivity varies, and we compare this with the complete-information case. Our analysis illustrates the incomplete-information approach to psychological games and can help organize experimental results in the Trust Game.
|Date of creation:||Jun 2013|
|Date of revision:||Jun 2013|
|Contact details of provider:|| Postal: |
Phone: +39 02 6448 3089
Fax: +39 02 6448 3085
Web page: http://dipeco.economia.unimib.it
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Giuseppe Attanasi & Pierpaolo Battigalli & Rosemarie Nagel, 2013. "Disclosure of Belief-Dependent Preferences in a Trust Game," Working Papers 506, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Charles Bellemare & Alexander Sebald & Martin Strobel, 2011.
"Measuring the willingness to pay to avoid guilt: estimation using equilibrium and stated belief models,"
Journal of Applied Econometrics,
John Wiley & Sons, Ltd., vol. 26(3), pages 437-453, 04.
- Bellemare, Charles & Sebald, Alexander & Strobel, Martin, 2010. "Measuring the Willingness to Pay to Avoid Guilt: Estimation Using Equilibrium and Stated Belief Models," IZA Discussion Papers 4803, Institute for the Study of Labor (IZA).
- 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.
- Charles Bellemare & Alexander Sebald & Martin Strobel, 2010. "Measuring the Willingness to Pay to Avoid Guilt: Estimation using Equilibrium and Stated Belief Models," Discussion Papers 10-08, University of Copenhagen. Department of Economics.
- Simon Gaechter & Daniele Nosenzo & Elke Renner & Martin Sefton, 2009.
"Who Makes A Good Leader? Cooperativeness, Optimism And Leading-By-Example,"
2009-19, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
- Simon Gächter & Daniele Nosenzo & Elke Renner & Martin Sefton, 2012. "Who Makes A Good Leader? Cooperativeness, Optimism, And Leading-By-Example," Economic Inquiry, Western Economic Association International, vol. 50(4), pages 953-967, October.
- Simon Gaechter & Daniele Nosenzo & Elke Renner & Martin Sefton, 2009. "Who Makes A Good Leader? Cooperativeness, Optimism And Leading-By-Example," Discussion Papers 2009-19, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
- Gerardo A. Guerra & Daniel John Zizzo, 2002.
"Trust Responsiveness and Beliefs,"
Economics Series Working Papers
99, University of Oxford, Department of Economics.
- 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.
- Dufwenberg, Martin, 2002. "Marital investments, time consistency and emotions," Journal of Economic Behavior & Organization, Elsevier, vol. 48(1), pages 57-69, May.
- 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.
- Caplin, A. & Leahy, J., 1999.
"The Supply of Information by a Concerned Expert,"
99-08, C.V. Starr Center for Applied Economics, New York University.
- Uri Gneezy, 2005. "Deception: The Role of Consequences," American Economic Review, American Economic Association, vol. 95(1), pages 384-394, March.
When requesting a correction, please mention this item's handle: RePEc:mib:wpaper:246. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roberto Reale)
If references are entirely missing, you can add them using this form.