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Your Morals are Your Moods

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  • Kirchsteiger, G.
  • Rigotti, L.

    (Tilburg University, School of Economics and Management)

  • Rustichini, A.

    (Tilburg University, School of Economics and Management)

Abstract

We test the effect of players' moods on their behavior in a gift-exchange game. In the first stage of the game, player 1 chooses a transfer to player 2. In the second stage, player 2 chooses an effort level. Higher effort is more costly for player 2, but it increases player 1's payoff. We say that player 2 reciprocates if effort is increasing in the transfer received. Player 2 is generous if an effort is incurred even when no transfer is received. Subjects play this game in two different moods. To induce a `bad mood', subjects in the role of player 2 watched a sad movie before playing the game; to induce a `good mood', they watched a funny movie. Mood induction was effective: subjects who saw the funny movie reported a significantly better mood than those who saw the sad movie. These two moods lead to significant differences in player 2's behavior. We find that a bad mood implies more reciprocity while a good mood implies more generosity. Since high transfers are relatively more common, player 1 makes more money when second movers are in a bad mood.
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Suggested Citation

  • Kirchsteiger, G. & Rigotti, L. & Rustichini, A., 2000. "Your Morals are Your Moods," Other publications TiSEM 01413830-fe0d-485d-94b1-d, Tilburg University, School of Economics and Management.
  • Handle: RePEc:tiu:tiutis:01413830-fe0d-485d-94b1-dd5c953ff4d7
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    References listed on IDEAS

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    Cited by:

    1. Dufwenberg, Martin & Kirchsteiger, Georg, 2004. "A theory of sequential reciprocity," Games and Economic Behavior, Elsevier, vol. 47(2), pages 268-298, May.
    2. Gary Charness & Guillaume R. Frechette & John H. Kagel, 2004. "How Robust is Laboratory Gift Exchange?," Experimental Economics, Springer;Economic Science Association, vol. 7(2), pages 189-205, June.
    3. Danielson, Anders J. & Holm, Hakan J., 2007. "Do you trust your brethren?: Eliciting trust attitudes and trust behavior in a Tanzanian congregation," Journal of Economic Behavior & Organization, Elsevier, vol. 62(2), pages 255-271, February.
    4. Young, H. Peyton, 2009. "Learning by trial and error," Games and Economic Behavior, Elsevier, vol. 65(2), pages 626-643, March.

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    More about this item

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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