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Procedural Concerns

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  • Sebald, Alexander

Abstract

Different to other scientific disciplines traditional economic theory has remained remarkably silent about procedural aspects of strategic interactions. Much to the contrast, among psychologists there is by now a broad consensus that not only expected outcomes shape human behavior, but also procedures that are used to take decisions. It is argued that procedural concerns are especially pervasive in the resolution of conflicts. In our paper we show that procedural concerns are in fact an inherent feature of the interaction of reciprocal agents. More precisely, using Dufwenberg and Kirchsteiger (2004)’s theory of sequential reciprocity we demonstrate that procedural choices determine the responsibility that people have for outcomes. The responsibility for outcomes in turn influences peoples’ evaluations of intentions and, hence, subsequent reactions. Two applications are discussed to highlight the impact and importance of procedural concerns in strategic interactions.

Suggested Citation

  • Sebald, Alexander, 2007. "Procedural Concerns," MPRA Paper 4508, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:4508
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    References listed on IDEAS

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    1. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory of Fairness, Competition, and Cooperation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(3), pages 817-868.
    2. Falk, Armin & Fischbacher, Urs, 2006. "A theory of reciprocity," Games and Economic Behavior, Elsevier, vol. 54(2), pages 293-315, February.
    3. Nalebuff, B. & Shubik, M., 1988. "Revenge And Rational Play," Papers 138, Princeton, Woodrow Wilson School - Public and International Affairs.
    4. Michal Krawczyk, 2011. "A model of procedural and distributive fairness," Theory and Decision, Springer, vol. 70(1), pages 111-128, January.
    5. Battigalli, Pierpaolo & Dufwenberg, Martin, 2009. "Dynamic psychological games," Journal of Economic Theory, Elsevier, vol. 144(1), pages 1-35, January.
    6. Dufwenberg, Martin & Kirchsteiger, Georg, 2004. "A theory of sequential reciprocity," Games and Economic Behavior, Elsevier, vol. 47(2), pages 268-298, May.
    7. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March.
    8. Gary E Bolton & Jordi Brandts & Axel Ockenfels, 2005. "Fair Procedures: Evidence from Games Involving Lotteries," Economic Journal, Royal Economic Society, vol. 115(506), pages 1054-1076, October.
    9. Cremer, David De & Knippenberg, Daan van, 2003. "Cooperation with leaders in social dilemmas: On the effects of procedural fairness and outcome favorability in structural cooperation," Organizational Behavior and Human Decision Processes, Elsevier, vol. 91(1), pages 1-11, May.
    10. Blount, Sally, 1995. "When Social Outcomes Aren't Fair: The Effect of Causal Attributions on Preferences," Organizational Behavior and Human Decision Processes, Elsevier, vol. 63(2), pages 131-144, August.
    11. Geanakoplos, John & Pearce, David & Stacchetti, Ennio, 1989. "Psychological games and sequential rationality," Games and Economic Behavior, Elsevier, vol. 1(1), pages 60-79, March.
    12. Rabin, Matthew, 1993. "Incorporating Fairness into Game Theory and Economics," American Economic Review, American Economic Association, vol. 83(5), pages 1281-1302, December.
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    Citations

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    Cited by:

    1. Jean-Michel Oudot & Claude Ménard, 2010. "Opportunisme ou équité ? Le cas des contrats d’approvisionnement de défense," Revue Française d'Économie, Programme National Persée, vol. 24(3), pages 195-226.
    2. Ingrid Rohde & Kirsten Rohde, 2011. "Risk attitudes in a social context," Journal of Risk and Uncertainty, Springer, vol. 43(3), pages 205-225, December.
    3. Pierpaolo Battigalli & Martin Dufwenberg & Alec Smith, 2015. "Frustration and Anger in Games," Working Papers 539, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    4. Alexander Sebald & Markus Walzl, 2008. "How Ego-threats Facilitate Contracts Based on Subjective Evaluations," Discussion Papers 08-19, University of Copenhagen. Department of Economics.
    5. Michal Krawczyk, 2011. "A model of procedural and distributive fairness," Theory and Decision, Springer, vol. 70(1), pages 111-128, January.
    6. Alexander Sebald & Markus Walzl, 2012. "Optimal contracts based on subjective evaluations and reciprocity," Working Papers 2012-16, Faculty of Economics and Statistics, Universität Innsbruck, revised Nov 2014.

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    More about this item

    Keywords

    Psychological Games; Procedural Concerns; Reciprocity;
    All these keywords.

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles

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