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Abstract
Pro-social individuals face a trade-off between their monetary and moral motives. Hence, they may be tempted to exploit the uncertainty in their decision environment in order to reconcile this trade-off. In this paper, we investigate whether individuals with belief-dependent preferences avoid the monetary cost of behaving according to their moral standards by strategically acquiring information about others' expectations. We test the predicitions of an information acquisition model in an online experiment. We use a modified trust-game in which we introduce uncertainty about the second movers' beliefs about first-movers' expectations. Our design enables to (i) identify participants with belief-based preferences and (ii) investigate their information acquisition strategy. Consistent with our predictions of subjective preferences, we find that most individuals classified as belief-dependent strategically select their source of information to avoid the cost of their conscience.
Document type: | Working paper |
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Series Name: | Discussion Paper Series, University of Heidelberg, Department of Economics |
Volume: | 0705 |
Place of Publication: | Heidelberg |
Date Deposited: | 07 Sep 2021 15:24 |
Date: | 14 July 2021 |
Number of Pages: | 60 |
Faculties / Institutes: | The Faculty of Economics and Social Studies > Alfred-Weber-Institut for Economics |
DDC-classification: | 330 Economics |
Uncontrolled Keywords: | Belief-dependent preferences, illusory preferences, information acquisition, self-serving biases, experiment |