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Your Morals Are Your Moods

  • Georg Kirchsteiger

    (University of Vienna)

  • Luca Rigotti

    (CentER, Tilburg University, & U.C. Berkeley)

  • Aldo Rustichini

    (Boston University & University of Minnesota)

We test the effect of players' moods on their behavior in a gift-exchange game. In the first stage of the game, player 1 chooses a transfer to player 2. In the second stage, player 2 chooses an effort level. Higher effort is more costly for player 2, but it increases player 1's payoff. We say that player 2 reciprocates if effort is increasing in the transfer received. Player 2 is generous if an effort is incurred even when no transfer is received. Subjects play this game in two different moods. To induce a `bad mood', subjects in the role of player 2 watched a sad movie before playing the game; to induce a `good mood', they watched a funny movie. Mood induction was effective: subjects who saw the funny movie reported a significantly better mood than those who saw the sad movie. These two moods lead to significant differences in player 2's behavior. We find that a bad mood implies more reciprocity while a good mood implies more generosity. Since high transfers are relatively more common, player 1 makes more money when second movers are in a bad mood.

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Paper provided by EconWPA in its series Game Theory and Information with number 0012005.

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Length: 32 pages
Date of creation: 09 Feb 2001
Date of revision:
Handle: RePEc:wpa:wuwpga:0012005
Note: 32 pages, Acrobat .pdf
Contact details of provider: Web page: http://econwpa.repec.org

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  1. Charness, Gary & Grosskopf, Brit, 2001. "Relative payoffs and happiness: an experimental study," Journal of Economic Behavior & Organization, Elsevier, vol. 45(3), pages 301-328, July.
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