A representation theorem for guilt aversion


Guilt aversion has been shown to play an important role in economic decision-making. In this paper, we take an axiomatic approach to guilt by deducing a utility representation from a list of easily interpretable assumptions on an agent's preferences. It turns out that our logarithmic representation can mitigate the problem of multiplicity of equilibria to which psychological games are prone. We apply the model in three well-known games and show that its predictions are consistent with experimental observations.

Publication DOI: https://doi.org/10.1016/j.jebo.2016.02.001
Divisions: College of Business and Social Sciences > Aston Business School > Economics, Finance & Entrepreneurship
College of Business and Social Sciences > Aston Business School
Additional Information: © 2016, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International http://creativecommons.org/licenses/by-nc-nd/4.0/
Uncontrolled Keywords: Guilt aversion,Psychological games,Utility representation
Publication ISSN: 0167-2681
Last Modified: 03 Jun 2024 07:33
Date Deposited: 18 Jul 2018 12:35
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Related URLs: https://www.sci ... 0238?via%3Dihub (Publisher URL)
PURE Output Type: Article
Published Date: 2016-05
Accepted Date: 2016-02-11
Authors: Jensen, Martin
Kozlovskaya, Maria (ORCID Profile 0000-0002-6882-0377)

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