Guilt Aversion Research Articles

When do the expectations of others matter? Experimental evidence on distributional justice and guilt aversion

Distributional justice—measured by the proportionality between effort exerted and rewards obtained—and guilt aversion—triggered by not fulfilling others’ expectations—are widely acknowledged fundamental sources of pro-social behavior. We design three experiments to study the relevance of these sources of behavior when considered in interaction. In particular, we investigate whether subjects fulfill others’ expectations also when this could produce inequitable allocations that conflict with distributional justice considerations. Our results confirm that both justice considerations and guilt aversion are important drivers of pro-social behavior, with the former having an overall stronger impact than the latter. Expectations of others are less relevant in environments more likely to nurture equitable outcomes.

Information on Social Value Orientation and Contributions to a Public Good: Theory and Experimental Evidence

We explore the extent to which information about the social value orientation (SVO) of group members influences contributions to a public good. We compare four networks of information - empty, pair, star and complete. We find that information about SVO has a significant impact on contributions in an experimental setting. This impact is consistent with theoretical predictions based on reciprocity and guilt aversion. We show that a star network with a pro-social manager has the biggest positive effect on contributions.

The rationale of in-group favoritism: An experimental test of three explanations

We aim to empirically investigate the rationale of in-group-favoritism. As potential explanations, we concentrate on intrinsic preferences for own-group members and motivations related to individuals caring about the beliefs of others (founded on guilt aversion). We also consider their intersection. Our evidence shows that in-group-favoritism cannot be accounted for by changes in expectations. This suggests that preferences per se are the most powerful explanation of social identity.

An Economic Analysis of Business Drinking: Evidence from a Lab-in-the-field Experiment

Alcohol consumption is an important component of business negotiations across many cultures, yet this behavior remains unmodeled and its potential implications untested. This paper is a step towards filling that gap. We develop a theory that combines guilt-aversion with a canonical alcohol myopia framework. Our GAAM (guilt aversion and alcohol myopia) model predicts that intoxication increases promise-making but has no effect on promise-breaking. We test these predictions using a prisoner’s dilemma game with pre-play communication in a lab-in-the-field experiment. Among males, we find behavior consistent with predictions: intoxication promotes promise-making behavior but does not impact the rate at which promises are trusted or broken. Consequently, intoxication increases communication efficiency. We do not observe intoxication to impact female promise-making, trusting, or promise-breaking behaviors. This is consistent with previous empirical findings that females are substantially less sensitive than males to alcohol-induced myopia.

The short arm of guilt – An experiment on group identity and guilt aversion

In a laboratory experiment, I test whether guilt aversion, i.e., a preference to fulfill the expectations of others, plays out more strongly if agents share an induced social identity. Participants play a dictator game in which they can condition their amount sent on recipients’ beliefs. Dictators either play with a recipient from their own group (ingroup treatment) or from the other group (outgroup treatment). I find that the positive influence of second-order beliefs on how much a dictator sends is stronger in the ingroup treatment. However, the way dictators react to very high expectations does not differ significantly between treatments. In contrast to previous work I do not find that amounts sent are an inversely u-shaped function of recipients’ expectations. Rather, and independently of the treatment, participants tend to ignore very high expectations.

Formal insurance and informal risk sharing dynamics

Abstract This paper investigates whether and how the crowding-out effect of formal insurance on informal risk sharing is mitigated by social preference change. We design a lab experiment in which formal insurance is introduced and removed unexpectedly in a repeated risk-sharing game. We find evidence of social preference change by showing that informal risk sharing is significantly improved after the removal of formal insurance, and the pattern mainly occurs when one subject obtains insurance but the other does not. Findings suggest that it is the insurance purchasers who take the initiative to share more risk for their partners. However, there is no significant improvement in informal risk sharing when insurance purchasing decisions are randomly computer generated. We propose a model based on guilt aversion to explain our findings.

Guilt aversion in economics and psychology

We investigate whether the concept of guilt aversion in economics is related to the psychological characterization of the same phenomenon. For trust games and dictator games we report correlations between the guilt sensitivity measured within a framework of psychological games most common in economics and the guilt sensitivity measured using a questionnaire common in psychology (TOSCA-3). We find that the two measures correlate well and significantly in the two settings.

Psychopathic traits are related to diminished guilt aversion and reduced trustworthiness during social decision-making

Individuals with high levels of psychopathic tendencies tend to show a lack of guilt, a lack of empathic concern, and a disregard for the impact of their decisions on others. However, how guilt influences social decision-making for those with high psychopathic traits is still unknown. Here, we investigated how psychopathic traits relate to the capacity to acquire knowledge about social expectations, and to what extent guilt aversion affects subsequent decision-making. 63 participants completed self-report measures of psychopathy, and then played a modified Trust Game in the role of the Trustee. Results showed that participants’ self-reported beliefs about their partner’s expectations were largely predictive of the amount of money they returned to the partner. These decisions were negatively correlated with the PPI-I scores. Furthermore, participants’ degree of guilt aversion were negatively correlated with PPI total scores. Our findings suggest that individuals with higher psychopathic traits are indeed capable of understanding the expectations of others, but do not seem to directly utilise this knowledge in their social decision-making, and experience less anticipated guilt about this. The present study provides empirical evidence of intact social knowledge coupled with decreased reciprocity and diminished guilt aversion as levels of psychopathic traits increase.

Formal Insurance and Informal Risk Sharing Dynamics

This paper investigates whether and how the crowding-out effect of formal insurance on informal risk sharing is mitigated by social preference change. We design a lab experiment in which formal insurance is introduced and removed unexpectedly in a repeated risk-sharing game. We find evidence of social preference change by showing that informal risk sharing is significantly improved after the removal of formal insurance, and the pattern mainly occurs when one subject obtains insurance but the other does not. Findings suggest that it is the insurance purchasers who take the initiative to share more risk for their partners. However, there is no significant improvement in informal risk sharing when insurance purchasing decisions are randomly computer generated. We propose a model based on guilt aversion to explain our findings.

The computational and neural substrates of moral strategies in social decision-making

Individuals employ different moral principles to guide their social decision-making, thus expressing a specific ‘moral strategy’. Which computations characterize different moral strategies, and how might they be instantiated in the brain? Here, we tackle these questions in the context of decisions about reciprocity using a modified Trust Game. We show that different participants spontaneously and consistently employ different moral strategies. By mapping an integrative computational model of reciprocity decisions onto brain activity using inter-subject representational similarity analysis of fMRI data, we find markedly different neural substrates for the strategies of ‘guilt aversion’ and ‘inequity aversion’, even under conditions where the two strategies produce the same choices. We also identify a new strategy, ‘moral opportunism’, in which participants adaptively switch between guilt and inequity aversion, with a corresponding switch observed in their neural activation patterns. These findings provide a valuable view into understanding how different individuals may utilize different moral principles.

Embezzlement and guilt aversion

Psychological game theory can contribute to renew the analysis of unethical behavior by providing insights on the nature of the moral costs of dishonesty. We investigate the moral costs of embezzlement in situations where donors need intermediaries to transfer their donations to recipients and where donations can be embezzled before they reach the recipients. We design a novel three-player Embezzlement Mini-Game to study whether intermediaries in the laboratory suffer from guilt aversion and whether guilt aversion affects the decision to embezzle. We show that the proportion of guilt-averse intermediaries is the same irrespective of the direction of guilt and guilt aversion reduces embezzlement. Structural estimates indicate no difference in the effect of guilt aversion toward the donor and toward the recipient on intermediaries’ behavior. This is striking as embezzlement affects the earnings of the recipient but not those of the donor. It shows that guilt aversion matters even when decisions have no direct monetary consequences.

Guilt Aversion in Economics and Psychology

We investigate whether the concept of guilt aversion in economics is related to the psychological characterization of the same phenomenon. For trust games and dictator games we report correlations between the guilt sensitivity measured within a framework of psychological games most common in economics and the guilt sensitivity measured using a questionnaire common in psychology (TOSCA-3). We find that the two measures correlate well and significantly in the two settings.

Measuring Belief-Dependent Preferences Without Information About Beliefs

We derive bounds on the causal effect of belief-dependent preferences (reciprocity and guilt aversion) on choices in sequential two-player games without exploiting information or data on the (higher-order) beliefs of players. We show how informative bounds can be derived by exploiting a specific invariance property common to those preferences. We illustrate our approach by analyzing data from an experiment conducted in Denmark. Our approach produces tight bounds on the causal effect of reciprocity in the games we consider. These bounds suggest there exists significant reciprocity in our population – a result also substantiated by the participants' answers to a post-experimental questionnaire.On the other hand, our approach yields high implausible estimates of guilt aversion. We contrast our estimated bounds with point estimates obtained using data on self-declared higher-order beliefs, keeping all other aspects of the model unchanged. We find that point estimates fall within our estimated bounds suggesting that elicited higher-order belief data in our experiment is weakly (if at all) affected by a potential endogeneity problem due to e.g. false consensus effects.

Belief-dependent preferences and reputation: Experimental analysis of a repeated trust game

We study in a theoretical and experimental setting the interaction between belief-dependent preferences and reputation building in a finitely repeated trust game. We focus mainly on the effect of guilt aversion. In a simple two-type model, we analyze the effect of reputation building in the presence of guilt-averse trustees and derive behavioral predictions. We test these predictions in a laboratory experiment where we elicit information on trustees’ belief-dependent preferences and disclose it to the paired trustor before the repeated game.

Broken promises and hidden partnerships: An experiment

Previous research indicates that cheap-talk promises promote cooperation. We extend the empirical study of promises to a three person environment. Doing this enabled us to study two features of promises in the naturally occurring world that have not been studied in the previous literature. For one, we are able to determine the impact of “contingent” promises, which refers to promises that need to be kept (or broken) only in the event that another event first occurs. Second, we were able to study “promise chains”, by which we mean a set of sequentially-made promises. In both cases, we are able to apply existing theories to these novel environments to predict promise keeping behavior. Consistent with theory predictions, we find that promises are not necessary, and do not change behavior, when incentives are aligned. When there is conflict of interest, and when a promise is definite (that is, not contingent), we find that people are indeed willing to forgo monetary payoff to keep their promises. However, when the promise is contingent, promises no longer promote cooperation: people are equally like to choose a selfish action regardless whether they made a promise. Finally, we find that promise chains do not promote trustworthiness, with people at the end of the chain no more likely to honor their promises than people at earlier positions, despite the additional indirect harm that people later in the chain cause by defecting. Our findings offer insights relevant for the behavioral economic theory of guilt aversion.

The influence of psychological game theory

The article analyzes the impact of three important areas in psychological game theory (PGT), namely the basic framework, reciprocity, and guilt aversion. Using a set of 12 highly-influential articles in these areas, their citing articles in the Web of Science are analyzed in terms of research areas (Web of Science categories), citing journals, citing authors, and publication years. The results show that the discipline most influenced by PGT is economics, but also that PGT has impact on other disciplines such as psychology, management, business, law, operations research and many others. In terms of the journals citing PGT the most, and probably also contributing to PGT the most articles, the Journal of Economic Behavior and Organization is clearly the most important journal. Finally, analysis of citing articles by year shows a consistent and steady increase in the number of articles citing PGT over the years, suggesting that PGT has gained significant attention in recent years.

A survey of belief-based guilt aversion in trust and dictator games

The evidence for belief-based guilt aversion is reviewed with a particular focus on trust games and dictator games. By way of comparison an alternative model to belief-based guilt aversion is proposed which is based on an internalized norm. We show that the experimental evidence to date is consistent with belief-based guilt aversion but that it is difficult to distinguish one model from another. The review compares the many different approaches that have been used to elicit beliefs. It also looks at the role of exposure and communication.

Guilt Aversion and Reciprocity in the Performance-Enhancing Drug Game

We revisit the performance-enhancing drug game by applying models of guilt aversion and reciprocity. Both models fit within the framework of psychological game theory in that they allow payoffs to depend on beliefs. We explore the extent to which social norms can help reduce or eliminate doping in sport. With reciprocity, we see that first-order beliefs on the prevalence of doping are key and a norm of clean sport would require a coordinated shift in such beliefs. With guilt aversion, by contrast, second-order beliefs are key and individuals may have an incentive to race clean even if they expect competitors will dope. Our results point to the importance for sports bodies and coaches to manage the beliefs of athletes.

Promises, expectations & causation

Why do people keep their promises? Vanberg (2008) and Ederer and Stremitzer (2017) provide causal evidence in favor of, respectively, an intrinsic preference for keeping one's word and Charness and Dufwenberg's (2006) expectations-based account based on guilt aversion. The overall picture is incomplete though, as no study disentangles effects in a design that provides exogenous variation of both (the key features of) promises and beliefs. We report evidence from an experimental design that does so.

Guilt and participation

How does guilt affect participation in providing public goods? We characterise and analyse completely mixed symmetric equilibria (CMSE) in participation games where players are guilt averse. We find that relative to material preferences, guilt aversion can: facilitate the existence of CMSE; increase or decrease participation; and imply that group size has a non-monotonic effect on participation. Using our equilibrium characterisation we also re-analyse experimental data on participation games and find a low, but positive, guilt sensitivity parameter.