A representation theorem for guilt aversion

Jensen, Martin Kaae; Kozlovskaya, Maria

Abstract

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.

Citation

Jensen, M. K., & Kozlovskaya, M. (2016). A representation theorem for guilt aversion. Journal of Economic Behavior and Organization, 125, 148-161. https://doi.org/10.1016/j.jebo.2016.02.001

• Journal Article Type: Article
• Acceptance Date: Feb 11, 2016
• Online Publication Date: Mar 5, 2016
• Publication Date: 2016-05
• Deposit Date: Jun 22, 2020
• Publicly Available Date: Jun 22, 2020
• Journal: Journal of Economic Behavior & Organization
• Print ISSN: 0167-2681
• Electronic ISSN: 2328-7616
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 125
• Pages: 148-161
• DOI: https://doi.org/10.1016/j.jebo.2016.02.001
• Keywords: Economics and Econometrics; Organizational Behavior and Human Resource Management
• Public URL: https://nottingham-repository.worktribe.com/output/4701083
• Publisher URL: https://www.sciencedirect.com/science/article/abs/pii/S0167268116000238
• Additional Information: This article is maintained by: Elsevier; Article Title: A representation theorem for guilt aversion; Journal Title: Journal of Economic Behavior & Organization; CrossRef DOI link to publisher maintained version: https://doi.org/10.1016/j.jebo.2016.02.001; Content Type: article; Copyright: © 2016 Elsevier B.V. All rights reserved.