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.
Incomplete-information models of guilt aversion in the trust game / Attanasi, Giuseppe; Battigalli, Pierpaolo; Manzoni, Elena. - In: MANAGEMENT SCIENCE. - ISSN 0025-1909. - 62:3(2016), pp. 648-667. [10.1287/mnsc.2015.2154]
Incomplete-information models of guilt aversion in the trust game
Giuseppe Attanasi
;
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.File | Dimensione | Formato | |
---|---|---|---|
Attanasi_Incomplete_2016.pdf
solo gestori archivio
Tipologia:
Versione editoriale (versione pubblicata con il layout dell'editore)
Licenza:
Tutti i diritti riservati (All rights reserved)
Dimensione
840.41 kB
Formato
Adobe PDF
|
840.41 kB | Adobe PDF | Contatta l'autore |
I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.