We thank Roland Benabou and Wolfgang Pesendorfer for their invaluable support. We are also grateful to Eric Maskin, Stephen Morris, Andrew Postlewaite, Charles Roddie, and Tymon Tatur for helpful suggestions. A co-editor and two anonymous referees provided valuable comments that improved the paper significantly. This paper was written in part while the authors were graduate prize fellows at the University Center for Human Values, Princeton University. Financial support from the NSF under Grant SES-0550540 is gratefully acknowledged.
Ashamed to be selfish
Version of Record online: 10 JAN 2012
Copyright © 2012 David Dillenberger and Philipp Sadowski
Volume 7, Issue 1, pages 99–124, January 2012
How to Cite
Dillenberger, D. and Sadowski, P. (2012), Ashamed to be selfish. Theoretical Economics, 7: 99–124. doi: 10.3982/TE674
- Issue online: 10 JAN 2012
- Version of Record online: 10 JAN 2012
- Submitted 2009-11-3. Final version accepted 2010-12-8. Available online 2010-12-8.
- subjective norm;
- dictator game;
- Nash bargaining solution
We study a decision maker (DM) who has preferences over choice problems, which are sets of payoff allocations between herself and a passive recipient. An example of such a set is the collection of possible allocations in the classic dictator game. The choice of an allocation from the set is observed by the recipient, whereas the choice of the set itself is not. Behaving selfishly under observation, in the sense of not choosing the normatively best allocation, inflicts shame on the DM. We derive a representation that identifies the DM's private ranking of allocations, her subjective norm, and her shame. The normatively best allocation can be further characterized as the Nash solution of a bargaining game induced by the second-stage choice problem.