 Effects of externalities on emotions: A game-theoretic analysisSung-Hoon Park Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), 2025, vol. 114, issue C Abstract: We model two players’ emotions with externalities as a three-stage game in which each player can disclose their emotional information. To solve for the equilibrium of the game, we work backwards. In equilibrium, we obtain the following results. First, players reveal their emotional information. Second, the factor determining a player's emotion is the externality generated by the other player's effort—a player reveals altruism (envy) if the opponent's effort generates a positive (negative) externality. Third, when players’ efforts generate negative externalities, a prisoner's dilemma arises. Fourth, each player's effort level and payoff change according to combinations of emotions and externalities—e.g., an altruist increases (decreases) their effort levels when the generated positive (negative) externalities increase, enhancing the increase in (mitigating the decrease in) the opponent's payoff. Keywords: Effort level; Heterogeneous externality; Observability of emotions; Payoff (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:soceco:v:114:y:2025:i:c:s2214804324001459 DOI: 10.1016/j.socec.2024.102308 Access Statistics for this article Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics) is currently edited by Pablo Brañas Garza More articles in Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics) from Elsevier |
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