Ashamed to be Selfish

Philipp Sadowski and David Dillenberger

No 10-84, Working Papers from Duke University, Department of Economics

Abstract: We study a decision maker (DM) who has preferences over sets of payoff-allocations between herself and a passive recipient, which represent second-stage choice problems. The recipient is only aware of second-stage choice of an allocation. Not choosing the normatively best allocation in the second stage inflicts shame on DM. We derive a representation that identifies DM's private ranking of allocations, her subjective norm, and shame. The normatively best allocation can be further characterized as the Nash solution of a bargaining game induced by the second-stage choice problem.

JEL-codes: C78 D63 D64 D80 D81 (search for similar items in EconPapers)
Pages: 30
Date: 2010
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