Your Morals are Your Moods

G. Kirchsteiger, L. Rigotti, A. Rustichini

Research output: Working paperDiscussion paperOther research output

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 make more money when second movers are in a bad mood.
Original languageEnglish
Place of PublicationTilburg
PublisherMicroeconomics
Number of pages37
Volume2000-122
Publication statusPublished - 2000

Publication series

NameCentER Discussion Paper
Volume2000-122

Keywords

  • rationality
  • motivation
  • game theory
  • emotions
  • reciprocity
  • gift giving

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