Ignorance is Bliss: A Game of Regret
Claudia Cerrone (),
Francesco Feri and
Philip R. Neary
Papers from arXiv.org
An individual can only experience regret if she learns about an unchosen alternative. In many situations, learning about an unchosen alternative is possible only if someone else chose it. We develop a model where the ex-post information available to each regret averse individual depends both on their own choice and on the choices of others, as others can reveal ex-post information about what might have been. This implies that what appears to be a series of isolated single-person decision problems is in fact a rich multi-player behavioural game, the regret game, where the psychological payoffs that depend on ex-post information are interconnected. For an open set of parameters, the regret game is a coordination game with multiple equilibria, despite the fact that all individuals possess a uniquely optimal choice in isolation. We experimentally test this prediction and find support for it.
Date: 2021-09, Revised 2023-07
New Economics Papers: this item is included in nep-gth, nep-isf, nep-mic and nep-upt
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Working Paper: Ignorance is bliss: a game of regret (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2109.10968
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