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Avoiding the cost of your conscience: belief dependent preferences and information acquisition

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  • Claire Rimbaud

    (Université Paris Dauphine-PSL, LEDa (UMR CNRS 8007))

  • Alice Soldà

    (Ghent University)

Abstract

Pro-social individuals typically face a trade-off between their monetary incentives and their other-regarding preferences. When this is the case, they may be tempted to exploit the uncertainty in their decision environment to reconcile this trade-off. In this paper, we investigate whether individuals with belief-dependent preferences acquire information about others’ expectations in a self-serving way. We present a model of endogenous information acquisition and test our theoretical predictions in an online experiment based on a modified trust-game in which the trustee is uncertain about the trustor’s expectations. Our experimental design enables us to (1) identify participants with belief-based preferences and (2) investigate their information acquisition strategy. Consistent with our predictions for subjective belief-dependent preferences, we find that most individuals classified as belief-dependent strategically select their source of information to avoid the cost of their conscience.

Suggested Citation

  • Claire Rimbaud & Alice Soldà, 2024. "Avoiding the cost of your conscience: belief dependent preferences and information acquisition," Experimental Economics, Springer;Economic Science Association, vol. 27(3), pages 491-547, July.
    • Handle: RePEc:kap:expeco:v:27:y:2024:i:3:d:10.1007_s10683-024-09827-z
    DOI: 10.1007/s10683-024-09827-z
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    Keywords

    Belief-dependent preferences; Information acquisition; Self-serving biases; Experiment;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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