Simple guilt and cooperation
Peeters, Ronald; Vorsatz, Marc

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Peeters, R., & Vorsatz, M. (2018). Simple guilt and cooperation (Discussion Paper No. 1801). University of Otago. Retrieved from http://hdl.handle.net/10523/7819
Permanent link to OUR Archive version:
http://hdl.handle.net/10523/7819
Abstract:
We introduce simple guilt into a generic prisoner’s dilemma (PD) game and solve for the equilibria of the resulting psychological game. It is shown that for all guilt parameters, it is a pure strategy equilibrium that both players defect. But, if the guilt parameter surpasses a threshold, a mixed strategy equilibrium and a pure strategy equilibrium in which both players cooperate emerge. We implement three payoff constellations of the PD game in a laboratory experiment and find in line with our equilibrium analysis that first- and second-order beliefs are highly correlated and that the probability of cooperation depends positively on these beliefs. Finally, we provide numerical evidence on the degree of guilt cooperators experience.
Date:
2018-01
Publisher:
University of Otago
Series number:
1801
ISSN:
1178-2293
Keywords:
Psychological game theory; Guilt; Prisoner’s dilemma
Research Type:
Discussion Paper
Languages:
English
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- Economics [302]
- Discussion Paper [429]
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