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Emotional Agency

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  • Botond Kőszegi

Abstract

This paper models interactions between a party with anticipatory emotions and a party who responds strategically to those emotions, a situation that is common in many health, political, employment, and personal settings. An "agent" has information with both decision-making value and emotional implications for an uninformed "principal" whose utility she wants to maximize. If she cannot directly reveal her information, to increase the principal's anticipatory utility she distorts instrumental decisions toward the action associated with good news. But because anticipatory utility derives from beliefs about instrumental outcomes, undistorted actions would yield higher ex ante total and anticipatory utility. If the agent can certifiably convey her information, she does so for good news, but unless this leads the principal to make a very costly mistake, to shelter his feelings she pretends to be uninformed when the news is bad.

Suggested Citation

  • Botond Kőszegi, 2006. "Emotional Agency," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(1), pages 121-155.
    • Handle: RePEc:oup:qjecon:v:121:y:2006:i:1:p:121-155.
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    File URL: http://hdl.handle.net/10.1093/qje/121.1.121
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    Citations

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    Cited by:

    1. Eliaz, Kfir & Schotter, Andrew, 2010. "Paying for confidence: An experimental study of the demand for non-instrumental information," Games and Economic Behavior, Elsevier, vol. 70(2), pages 304-324, November.
    2. Francesca Barigozzi & Rosella Levaggi, 2010. "Emotional decision-makers and anomalous attitudes towards information," Journal of Risk and Uncertainty, Springer, vol. 40(3), pages 255-280, June.
    3. Ismail Saglam & Mehmet Y. Gurdal & Ayca Ozdogan, 2011. "Truth-telling and Trust in Sender-receiver Games with Intervention," Koç University-TUSIAD Economic Research Forum Working Papers 1123, Koc University-TUSIAD Economic Research Forum.
    4. Marcello Montefiori & Marina Resta, 2009. "A computational approach for the health care market," Health Care Management Science, Springer, vol. 12(4), pages 344-350, December.
    5. Marcello Montefiori, 2008. "Information vs advertising in the market for hospital care," International Journal of Health Economics and Management, Springer, vol. 8(3), pages 145-162, September.
    6. Fels, Markus, 2015. "On the value of information: Why people reject medical tests," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 56(C), pages 1-12.
    7. Koszegi, Botond & Rabin, Matthew, 2008. "Choices, situations, and happiness," Journal of Public Economics, Elsevier, vol. 92(8-9), pages 1821-1832, August.
    8. Edoardo Grillo, 2013. "Reference Dependence, Risky Projects and Credible Information Transmission," Carlo Alberto Notebooks 331, Collegio Carlo Alberto.
    9. Alexander, Marcus & Christakis, Nicholas A., 2008. "Bias and asymmetric loss in expert forecasts: A study of physician prognostic behavior with respect to patient survival," Journal of Health Economics, Elsevier, vol. 27(4), pages 1095-1108, July.

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