Shaping beliefs in experimental markets for expert services: Guilt aversion and the impact of promises and money-burning options

B-Tier
Journal: Games and Economic Behavior
Year: 2013
Volume: 81
Issue: C
Pages: 145-164

Authors (4)

Score contribution per author:

0.503 = (α=2.01 / 4 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

In a credence goods game with an expert and a consumer, we study experimentally the impact of two devices that are predicted to induce consumer-friendly behavior if the expert has a propensity to feel guilty when he believes that he violates the consumerʼs payoff expectations: (i) an opportunity for the expert to make a non-binding promise; and (ii) an opportunity for the consumer to burn money. In belief-based guilt aversion theory the first opportunity shapes an expertʼs behavior if an appropriate promise is made and if it is expected to be believed by the consumer; by contrast, the second opportunity might change behavior even though this option is never used along the predicted path. Experimental results confirm the behavioral relevance of (i) but fail to confirm (ii).

Technical Details

RePEc Handle
repec:eee:gamebe:v:81:y:2013:i:c:p:145-164
Journal Field
Theory
Author Count
4
Added to Database
2026-01-25