Belief-dependent Preferences and Reputation: Experimental Analysis of a Repeated Trust Game

Giuseppe Attanasi, Pierpaolo Battigalli (), Elena Manzoni and Rosemarie Nagel

No 622, Working Papers from IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University

Abstract: We study in a theoretical and experimental setting the interaction between belief-dependent preferences and reputation building in a nitely repeated trust game. We focus mainly on the effect of guilt aversion. In a simple two-types model, we analyze the effect of reputation building in presence of guilt-averse players and derive behavioral predictions. In the experiment, we elicit information on trustees? belief-dependent preferences and disclose it to the paired trustor before the repeated game. Our ex- perimental results show that disclosing information on the trustee?s belief-dependent preferences and thus letting players play the repeated trust game in presence of almost complete information leads to higher trust and cooperation than in the corresponding incomplete information game setting. In particular, disclosure of information on preferences of guilt-averse trustees also enhances the trustors?cooperation. Disclosure of information on belief-dependent preferences of reciprocity-concerned trustees, instead, does not lead to higher trust and cooperation. We show that this is theoretically consistent with subjects featuring low reciprocity concerns. JEL classifi?cation: C72; C73; C91. Keywords: Repeated psychological game; reputation; guilt; reciprocity; almost complete information.

Date: 2018
New Economics Papers: this item is included in nep-cbe, nep-evo, nep-exp, nep-gth and nep-upt
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Citations: View citations in EconPapers (9)

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Related works:
Journal Article: Belief-dependent preferences and reputation: Experimental analysis of a repeated trust game (2019)
Working Paper: Belief-dependent preferences and reputation: Experimental analysis of a repeated trust game (2019)
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