Simple guilt and cooperation

Ronald Peeters and Marc Vorsatz

Journal of Economic Psychology, 2021, vol. 82, issue C

Abstract: We introduce simple guilt into a generic prisoner’s dilemma (PD) game and solve for the equilibria of the resulting psychological game. It is shown that for all guilt parameters, it is a pure strategy equilibrium that both players defect. But if the guilt parameter surpasses a threshold, a mixed strategy equilibrium and a pure strategy equilibrium in which both players cooperate emerge. We implement three payoff constellations of the PD game in a laboratory experiment and find in line with our equilibrium analysis that first- and second-order beliefs are highly correlated and that the probability of cooperation depends positively on these beliefs. Maximum likelihood estimations of a model of noisy introspection reveal that experimental data is best fitted with positive guilt levels and that omission of guilt results in a substantial increase in the noise parameters.

Keywords: Psychological game theory; Guilt; Prisoner’s dilemma (search for similar items in EconPapers)
JEL-codes: C72 C91 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Working Paper: Simple guilt and cooperation (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:joepsy:v:82:y:2021:i:c:s0167487020301045

DOI: 10.1016/j.joep.2020.102347

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