Heterogeneous Guilt Sensitivities and Incentive Effects

CRREP working paper serie 2017-08

32 Pages Posted: 22 May 2018

See all articles by Charles Bellemare

Charles Bellemare

Université Laval - Département d'Économique; Centre Interuniversitaire sur le Risque, les Politiques Economiques et l'Emploi (CIRPÉE); IZA Institute of Labor Economics

Alexander Sebald

University of Copenhagen - Department of Economics

Sigrid Suetens

University of Antwerp - Faculty of Applied Economics; Tilburg University

Date Written: August 01, 2017

Abstract

Psychological games of guilt aversion assume that preferences depend on (beliefs about) beliefs and on the guilt sensitivity of the decision-maker. We present an experiment designed to measure guilt sensitivities at the individual level for various stake sizes. We use the data to estimate a structural choice model that allows for heterogeneity, and permits that guilt sensitivities depend on stake size. We find substantial heterogeneity of guilt sensitivities in our population, with 60% of decision makers displaying stake-dependent guilt sensitivity. For these decision makers, we find that average guilt sensitivities are significantly different from zero for all stakes considered, while significantly decreasing with the level of stakes.

Keywords: guilt sensitivity, psychological game theory, Heterogeneity, stakes, dictator game

JEL Classification: A13, C91

Suggested Citation

Bellemare, Charles and Sebald, Alexander and Suetens, Sigrid, Heterogeneous Guilt Sensitivities and Incentive Effects (August 01, 2017). CRREP working paper serie 2017-08, Available at SSRN: https://ssrn.com/abstract=3175332 or http://dx.doi.org/10.2139/ssrn.3175332

Charles Bellemare (Contact Author)

Université Laval - Département d'Économique ( email )

2325 Rue de l'Université
Ste-Foy, Quebec G1K 7P4 G1K 7P4
Canada

Centre Interuniversitaire sur le Risque, les Politiques Economiques et l'Emploi (CIRPÉE)

Pavillon De Sève
Ste-Foy, Quebec G1K 7P4
Canada

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Alexander Sebald

University of Copenhagen - Department of Economics ( email )

Øster Farimagsgade 5
Bygning 26
1353 Copenhagen K.
Denmark

Sigrid Suetens

University of Antwerp - Faculty of Applied Economics ( email )

Prinsstraat 13
Antwerp, B-2000
Belgium
+32 3 220 40 38 (Phone)

Tilburg University

Postbus 90153
Tilburg, DC Noord-Brabant 5000 LE
Netherlands

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