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Working Papers |
Stochastic Choice and Deliberately Stochastic Behavior (with Keisuke Yoshihara)
Abstract.
In this study, we propose a stochastic choice model to identify the motivations of prosocial behavior. We focus on the role of inequity aversion in outcome-based preferences and the shame of acting selfishly in social concerns. We employ an additively perturbed utility model to social preferences that consists of the sum of expected utility and a non-linear cost function, where the utility function is purely selfish and the cost function depends on social preferences. Using the cost function, we distinguish between stochastic inequity-averse behavior and stochastic shame-mitigating behavior.
Link.
Link to SSRN.
Social Preferences and Cooperation: A Theoretical Analysis
Abstract.
In this study, we develop a framework to incorporate social preferences such as outcome-based social preferences, reciprocity, and social concerns into strategic interactions. We introduce a new equilibrium concept that is an extended version of Nash equilibria and study the one-shot prisoner's dilemma (PD). The framework has the two components to understand sustaining cooperation: (1) the payoff structure of the objectively given game, which is related to outcome-based social preferences, and (2) the belief structure among players, which is related to reciprocity and social concerns. We examine how cooperation in the one-shot PD is related to social preferences. We then state the conditions consistent with the experimental evidence of the one-shot PD. Finally, we apply our framework into trust games to study betrayal aversion in terms of social preferences with uncertainty-averse beliefs.
Link.