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Ashamed to be Selfish, Second Version

Author

Listed:
  • David Dillenberger

    (Department of Economics, University of Pennsylvania)

  • Philipp Sadowski

    (Department of Economics, Duke University)

Abstract

We study a two-stage choice problem. In the first stage, the decision maker (DM) chooses a set of payoff-allocations between herself and a passive recipient. In the second stage, DM chooses an allocation from the set. The recipient is only aware of the second stage choice. Choosing selfishly in the second stage, in the face of a fairer available alternative, may inflict shame on DM. We axiomatize a representation of DM’s preferences over sets that identifies DM’s selfish ranking, her norm of fairness and shame. It has been suggested that altruism is a prominent motive for non-selfish choice. We identify a condition under which shame to be selfish can mimic altruism, when the experimenter only records the second stage choice. An additional condition implies that the norm of fairness can be characterized as the Nash solution of a bargaining game induced by the second-stage choice problem. The representation is applied to a simple strategic situation, a game of trust.

Suggested Citation

  • David Dillenberger & Philipp Sadowski, 2008. "Ashamed to be Selfish, Second Version," PIER Working Paper Archive 09-014, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 14 Apr 2009.
    • Handle: RePEc:pen:papers:09-014
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    More about this item

    Keywords

    Selfishness; Fairness; Shame; Altruism;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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