Beliefs estimated from choices in Proposer-Responder Games

Tomás Lejarraga, Abel Lucena and Antoni Rubí-Barceló ()

Journal of Economic Behavior & Organization, 2020, vol. 179, issue C, 442-459

Abstract: We use a large public dataset of proposer-responder games to examine other-regarding preferences and beliefs. We model preferences and beliefs within a quantal response equilibrium framework using a non-linear mixed logit model that takes individual heterogeneity into account. Several measures indicate that parameters are reliably identified. Our participants are heterogeneous with respect to preferences and more so with regard to beliefs about others’ preferences. On average, proposers overestimate responders’ aversion to advantageous inequality, and think of responders as more averse to advantageous inequality and less averse to disadvantageous inequality than themselves. These findings are consistent with an optimism bias.

Keywords: Beliefs; Experiments; Quantal Response Equilibrium; Random-parameter estimation (search for similar items in EconPapers)
JEL-codes: C72 C91 D83 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:179:y:2020:i:c:p:442-459

DOI: 10.1016/j.jebo.2020.09.017

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