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. However, 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 needed. We take a first step in this direction, focusing on guilt aversion in the Trust Game. In our models, agents have heterogeneous belief hierarchies. We characterize equilibria where trust occurs with positive probability. Our analysis illustrates the incomplete-information approach to psychological games and can help to organize experimental results in the Trust Game.

Attanasi, G., Battigalli, P., Manzoni, E. (2016). Incomplete-information models of guilt aversion in the Trust Game. MANAGEMENT SCIENCE, 62(3), 648-667 [10.1287/mnsc.2015.2154].

Incomplete-information models of guilt aversion in the Trust Game

MANZONI, ELENA
Ultimo
2016

Abstract

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. However, 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 needed. We take a first step in this direction, focusing on guilt aversion in the Trust Game. In our models, agents have heterogeneous belief hierarchies. We characterize equilibria where trust occurs with positive probability. Our analysis illustrates the incomplete-information approach to psychological games and can help to organize experimental results in the Trust Game.
Articolo in rivista - Articolo scientifico
Guilt; Incomplete information; Psychological games; Trust Game;
Guilt; Incomplete information; Psychological games; Trust Game
English
2016
62
3
648
667
none
Attanasi, G., Battigalli, P., Manzoni, E. (2016). Incomplete-information models of guilt aversion in the Trust Game. MANAGEMENT SCIENCE, 62(3), 648-667 [10.1287/mnsc.2015.2154].
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10281/103412
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