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
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.
2016
2015
Attanasi, Giuseppe; Battigalli, Pierpaolo; Manzoni, Elena
File in questo prodotto:
File Dimensione Formato  
Attanasi, Battigalli & Manzoni (MS, 2015).pdf

non disponibili

Descrizione: Articolo
Tipologia: Documento in Post-print (Post-print document)
Licenza: NON PUBBLICO - Accesso privato/ristretto
Dimensione 934.02 kB
Formato Adobe PDF
934.02 kB Adobe PDF   Visualizza/Apri
Attanasi Battigalli Manzoni (2016, MS).pdf

non disponibili

Tipologia: Pdf editoriale (Publisher's layout)
Licenza: NON PUBBLICO - Accesso privato/ristretto
Dimensione 763.94 kB
Formato Adobe PDF
763.94 kB Adobe PDF   Visualizza/Apri

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11565/3985616
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 34
  • ???jsp.display-item.citation.isi??? 33
social impact