Embezzlement and Guilt Aversion
Professor, University of Lille 1, LEM (Lille Economics Management)
Abstract : Donors usually need intermediaries to transfer their donations to recipients. A risk is that donations can be embezzled before they reach the recipients. Using psychological game theory, we design a novel three-player Embezzlement Mini-Game to study whether intermediaries suffer from guilt aversion and whether guilt aversion toward the recipient is stronger than toward the donor. Testing the predictions of the model in a laboratory experiment, we show that the proportion of guilt-averse intermediaries is the same irrespective of the direction of the guilt. However, structural estimates indicate that the effect of guilt on behaviour is higher when the guilt is directed toward the recipient.
Université Montpellier - Faculté d'économie - salle 416
Avenue Raymond Dugrand 34960 Montpellier
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