Advertisement

Experimental Economics

, Volume 21, Issue 2, pp 316–336 | Cite as

Heterogeneous guilt sensitivities and incentive effects

  • Charles Bellemare
  • Alexander SebaldEmail author
  • Sigrid Suetens
Original Paper
First Online:

Abstract

Psychological games of guilt aversion assume that preferences depend on (beliefs about) beliefs and on the guilt sensitivity of the decision-maker. We present an experiment designed to measure guilt sensitivities at the individual level for various stake sizes. We use the data to estimate a structural choice model that allows for heterogeneity, and permits that guilt sensitivities depend on stake size. We find substantial heterogeneity of guilt sensitivities in our population, with 60% of decision makers displaying stake-dependent guilt sensitivity. For these decision makers, we find that average guilt sensitivities are significantly different from zero for all stakes considered, while significantly decreasing with the level of stakes.

Keywords

Guilt sensitivity Psychological game theory Heterogeneity Stakes Dictator game 

JEL Classification

A13 C91 
This is a preview of subscription content, log in to check access.

Notes

Acknowledgements

The authors thank audiences of seminars at the universities of Amsterdam, Copenhagen, Frankfurt, Gothenborg, Heidelberg, Innsbruck, Mannheim, Munich, Pennsylvania, and Tilburg, at the Max Planck Institute of Economics in Jena, at the Nordic Conference of Behavioral and Experimental Economics in Stockholm, and at IMEBE in Madrid for helpful comments. Furthermore, we would like to thank the editor and two anonymous referees for very helpful comments. Suetens acknowledges financial support from the Netherlands Organization for Scientific Research (NWO) through the VIDI program (Project No. 452-11-012).

Supplementary material

10683_2017_9543_MOESM1_ESM.pdf (46 kb)
Supplementary material 1 (pdf 46 KB)

References

  1. Abdellaoui, M., Barrios, C., & Wakker, P. P. (2007). Reconciling introspective utility with revealed preference: Experimental arguments based on prospect theory. Journal of Econometrics, 138, 356–378.CrossRefGoogle Scholar
  2. Andreoni, J., & Bernheim, B. D. (2009). Social image and the 50–50 norm: A theoretical and experimental analysis of audience effects. Econometrica, 77, 1607–1636.CrossRefGoogle Scholar
  3. Armantier, O., & Treich, N. (2013). Eliciting beliefs: Proper scoring rules, incentives, stakes and hedging. European Economic Review, 62, 17–40.CrossRefGoogle Scholar
  4. Attanasi, G., Battigalli, P., & Manzoni, E. (2015). Incomplete-information models of guilt aversion in the trust game. Management Science, 62(3), 648–667.CrossRefGoogle Scholar
  5. Attanasi, G., Battigalli, P., and Nagel, R. (2013). Disclosure of belief-dependent preferences in a trust game. Mimeo.Google Scholar
  6. Babcock, L., & Loewenstein, G. (1997). Explaining bargaining impasse: The role of self-serving biases. The Journal of Economic Perspectives, 11(1), 109–126.CrossRefGoogle Scholar
  7. Battigalli, P., & Dufwenberg, M. (2007). Guilt in games. American Economic Review Papers and Proceedings, 97, 170–176.CrossRefGoogle Scholar
  8. Battigalli, P., & Dufwenberg, M. (2009). Dynamic psychological games. Journal of Economic Theory, 144, 1–35.CrossRefGoogle Scholar
  9. Baumeister, R., Stillwell, A., & Heatherton, T. (1994). Guilt: An interpersonal approach. Psychological Bulletin, 115, 243–267.CrossRefGoogle Scholar
  10. Bellemare, C., Kröger, S., & van Soest, A. (2008). Measuring inequity aversion in a heterogeneous population using experimental decisions and subjective probabilities. Econometrica, 76, 815–839.CrossRefGoogle Scholar
  11. Bellemare, C., Sebald, A., & Strobel, M. (2011). Measuring the willingness to pay to avoid guilt: Estimation using equilibrium and stated belief models. Journal of Applied Econometrics, 26, 437–453.CrossRefGoogle Scholar
  12. Bellemare, C., Sebald, A., & Suetens, S. (2017). A note on testing guilt aversion. Games and Economic Behavior, 102, 233–239.CrossRefGoogle Scholar
  13. Bicchieri, C. (2006). The grammar of society: The nature and dynamics of social norms. Cambridge University Press.Google Scholar
  14. Bicchieri, C., & Xiao, E. (2009). Do the right thing: But only if others do so. Journal of Behavioral Decision Making, 22(2), 191–208.CrossRefGoogle Scholar
  15. Bicchieri, C., Xiao, E., & Muldoon, R. (2011). Trustworthiness is a social norm, but trusting is not. Politics, Philosophy, and Economics, 10, 170–187.CrossRefGoogle Scholar
  16. Camerer, C., & Hogarth, R. (1999). The effects of financial incentives in experiments: A review and capital-labor-production framework. Journal of Risk and Uncertainty, 19, 7–42.CrossRefGoogle Scholar
  17. Carpenter, J., Verhoogen, E., & Burks, S. (2005). The effect of stakes in distribution experiments. Economics Letters, 86, 393–398.CrossRefGoogle Scholar
  18. Charness, G., & Dufwenberg, M. (2006). Promises and partnerships. Econometrica, 74, 1579–1601.CrossRefGoogle Scholar
  19. Ellingsen, T., Johannesson, M., Tjötta, S., & Torsvik, G. (2010). Testing guilt aversion. Games and Economic Behavior, 68, 95–107.CrossRefGoogle Scholar
  20. Fehr, E., & Schmidt, K. (1999). A theory of fairness, competition and cooperation. Quarterly Journal of Economics, 114, 817–868.CrossRefGoogle Scholar
  21. Fischbacher, U. (2007). z-Tree: Zurich toolbox for ready-made economic experiments. Experimental Economics, 10, 171–178.CrossRefGoogle Scholar
  22. Geanakoplos, J., Pearce, D., & Stacchetti, E. (1989). Psychological games and sequential rationality. Games and Economic Behavior, 1, 60–79.CrossRefGoogle Scholar
  23. Gibson, R., Tanner, C., & Wagner, A. (2013). Preferences for truthfulness: Heterogeneity among and within individuals. American Economic Review, 103, 532–548.CrossRefGoogle Scholar
  24. Gneezy, U., Meier, S., & Rey-Biel, P. (2011). When and why incentives (don’t) work to modify behavior. Journal of Economic Perspective, 25, 191–210.CrossRefGoogle Scholar
  25. Greiner, B. (2004). The online recruitment system ORSEE 2.0—A guide for the organization of experiments in economics. Technical report, University of Cologne, Working Paper Series in Economics 10.Google Scholar
  26. Güth, W., Schmittberger, R., & Schwarze, B. (1982). An experimental analysis of ultimatum bargaining. Journal of Economic Behavior and Organization, 3(4), 367–388.CrossRefGoogle Scholar
  27. Holt, C., & Laury, S. (2002). Risk aversion and incentive effects. American Economic Review, 92, 1644–1655.CrossRefGoogle Scholar
  28. Khalmetski, K., Ockenfels, A., & Werner, P. (2015). Surprising gifts: Theory and laboratory evidence. Journal of Economic Theory, 159, 163–208.CrossRefGoogle Scholar
  29. Krupka, E. L., & Weber, R. A. (2013). Identifying social norms using coordination games: Why does dictator game sharing vary? Journal of the European Economic Association, 11, 495–524.CrossRefGoogle Scholar
  30. Noussair, C. N., Trautmann, S. T., & van de Kuilen, G. (2014). Higher order risk attitudes, demographics, and financial decisions. Review of Economic Studies, 81, 325–355.CrossRefGoogle Scholar
  31. Reuben, E., Sapienza, P., & Zingales, L. (2009). Is mistrust self-fulfilling? Economics Letters, 104, 89–91.CrossRefGoogle Scholar
  32. Schotter, A., & Sopher, B. (2007). Advice and behavior in intergenerational ultimatum games: An experimental approach. Games and Economic Behavior, 58(2), 365–393.CrossRefGoogle Scholar
  33. Selten, R. (1967). Die Strategiemethode zur Erforschung des Eingeschränkt Rationalen Verhaltens im Rahmen eines Oligopolexperiments. In H. Sauermann (Ed.), Beiträge zur Experimentellen Wirtschaftsforschung (pp. 136–168). Tübingen: J. C. B. Mohr.Google Scholar
  34. Smith, V., & Walker, J. (1993). Monetary rewards and decision costs in experimental economics. Economic Inquiry, 31, 245–261.CrossRefGoogle Scholar
  35. Trautmann, S. T., & van de Kuilen, G. (2015). Belief elicitation: A horse race among truth serums. Economic Journal (forthcoming).Google Scholar
  36. Vanberg, C. (2008). Why do people keep their promises? An experimental test of two explanations. Econometrica, 76, 1467–1480.CrossRefGoogle Scholar
  37. Yang, Y., Onderstal, S., & Schram, A. (2012). Inequity aversion revisited. Working paper, University of Amsterdam.Google Scholar

Copyright information

© Economic Science Association 2017

Authors and Affiliations

  • Charles Bellemare
    • 1
  • Alexander Sebald
    • 2
    Email author
  • Sigrid Suetens
    • 3
  1. 1.Département d’économiqueUniversité Laval, CRREPQuebec CityCanada
  2. 2.Department of EconomicsUniversity of CopenhagenCopenhagenDenmark
  3. 3.CentER, and TILECTilburg UniversityTilburgThe Netherlands

Personalised recommendations

Cite article

Buy options