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Ashamed to be Selfish

David Dillenberger () and Philipp Sadowski ()
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David Dillenberger: Department of Economics, University of Pennsylvania

PIER Working Paper Archive from Penn Institute for Economic Research, Department of Economics, University of Pennsylvania

Abstract: We study a two-stage choice problem, where alternatives are allocations between the decision maker (DM) and a passive recipient. The recipient observes choice behavior in stage two, while stage one choice is unobserved. Choosing selfishly in stage two, in the face of a fairer available alternative, may inflict shame on DM. DM has preferences over sets of alternatives that represent period two choices. We axiomatize a representation that identifies DM’s selfish ranking, her norm of fairness and shame. Altruism is the most prominent motive that can explain non-selfish choice. We identify a condition under which shame to be selfish can mimic altruism, when only stage-two choice is observed by the experimenter. An additional condition implies that the norm of fairness can be characterized as the Nash solution of a bargaining game induced by the second-stage choice problem. The representation is generalized to allow for finitely many recipients and applied to a simple strategic situation, a game of trust.

Keywords: selfishness; fairness; shame; altruism (search for similar items in EconPapers)
JEL-codes: C78 D63 D64 D80 D81 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2008-10-10
New Economics Papers: this item is included in nep-cbe, nep-evo, nep-exp and nep-soc
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