The limits of guilt

Loukas Balafoutas,Helena Fornwagner

doi:10.1007/s40881-017-0043-0

The limits of guilt

Loukas Balafoutas, Helena Fornwagner

Open Access

https://doi.org/10.1007/s40881-017-0043-0

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Abstract

According to the theory of guilt aversion, agents suffer a psychological cost whenever they fall short of other people’s expectations. In this paper, we suggest that there may be limits to this kind of motivation. We present evidence from an experimental dictator game showing that behavior is consistent with guilt aversion for relatively low levels of recipient expectations, roughly up to the point where the recipient expects half of the available surplus. Beyond that point the relationship between expectations and transfers becomes negative. Moreover, we examine this relationship at the individual level and establish a typology of subjects depending on how and whether they condition their behavior on recipient expectations.

Highlights

Human interaction—in families, companies, or clubs—is often influenced by one’s perception of other individuals’ expectations
The goal of this paper has been to contribute to the literature on guilt aversion by suggesting that the relationship between a decision maker’s behavior and an affected party’s perceived expectations need not be monotonic
Strategy method variant of the dictator game and shown that mean transfers across dictators increase with recipient expectations up to a certain threshold but decrease beyond that threshold

Summary

Introduction

Human interaction—in families, companies, or clubs—is often influenced by one’s perception of other individuals’ expectations. It seems that humans have a tendency to feel guilty when they are letting others down, i.e., when their actions do not meet what they believe others expect from them. This human trait has been coined guilt aversion, defined as the emotion that arises when a player ‘believes he hurts others relative to what they believe they will get’ (Charness and Dufwenberg 2006: 1583).. Guilt aversion is modeled within the analytical framework of psychological game theory (Geanakoplos et al 1989; Battigalli and Dufwenberg 2009)

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