The paper proposes to ways to capture guilt in the contexts of strategic interaction. We refer to the theoretical framework of dynamic psychological games, presented in another paper of us. Simple guilt is a dislike for letting the other down; guilt from blame is a dislike for the other's terminal belief that one has let him down. We provide conditions for equivalence of these two notions of guilt, showing by example that they are tight. We also show that every materially efficient outcome can be supported as an equilibrium if players are sufficiently sensitive to guilt. We stress the importance of players' ex post information partition.
Guilt in Games
BATTIGALLI, PIERPAOLO;
2007
Abstract
The paper proposes to ways to capture guilt in the contexts of strategic interaction. We refer to the theoretical framework of dynamic psychological games, presented in another paper of us. Simple guilt is a dislike for letting the other down; guilt from blame is a dislike for the other's terminal belief that one has let him down. We provide conditions for equivalence of these two notions of guilt, showing by example that they are tight. We also show that every materially efficient outcome can be supported as an equilibrium if players are sufficiently sensitive to guilt. We stress the importance of players' ex post information partition.
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