Anger impairs strategic behavior: A Beauty-Contest based analysis

Alessandro Castagnetti, Eugenio Proto and Andis Sofianos

Journal of Economic Behavior & Organization, 2023, vol. 213, issue C, 128-141

Abstract: The frustration-aggression hypothesis posits that anger affects economic behaviour essentially by temporally changing individual social preferences and specifically attitudes towards punishment. Here, we test a different channel in an experiment where we externally induce anger to a subgroup of participants (following a standard procedure that we verify by using a novel method of textual analysis). We show that anger can impair the capacity to think strategically in a beauty-contest game, in a pre-registered experiment. Angry participants choose numbers further away from the best response level and earn significantly lower profits. Using a finite mixture model, we show that anger increases the number of level-zero players by 9 percentage points, a percentage increase of more than 30%. Furthermore, with a second pre-registered experiment, we show that this effect is not common to all negative emotions. Sad participants do not play significantly further away from the best response level than the control group and sadness does not lead to more level-zero play.

Keywords: Anger; Induced emotions; Strategic interactions; Beauty-contest (search for similar items in EconPapers)
JEL-codes: C92 D90 D91 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:213:y:2023:i:c:p:128-141

DOI: 10.1016/j.jebo.2023.06.027

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