Next Article in Journal
Group Size, Coordination, and the Effectiveness of Punishment in the Voluntary Contributions Mechanism: An Experimental Investigation
Previous Article in Journal
Tacit Collusion under Fairness and Reciprocity
Games 2013, 4(1), 66-88; doi:10.3390/g4010066
Article

Hierarchical Bayesian Analysis of Biased Beliefs and Distributional Other-Regarding Preferences

*  and
ICS/Department of Sociology, Faculty of Social Sciences, Utrecht University, Padualaan 14, 3584 CH, The Netherlands
* Author to whom correspondence should be addressed.
Received: 22 November 2012 / Revised: 28 January 2013 / Accepted: 29 January 2013 / Published: 19 February 2013
View Full-Text   |   Download PDF [423 KB, uploaded 19 February 2013]   |  

Abstract

This study investigates the relationship between an actor’s beliefs about others’ other-regarding (social) preferences and her own other-regarding preferences, using an “avant-garde” hierarchical Bayesian method. We estimate two distributional other-regarding preference parameters, α and β, of actors using incentivized choice data in binary Dictator Games. Simultaneously, we estimate the distribution of actors’ beliefs about others α and β, conditional on actors’ own α and β, with incentivized belief elicitation. We demonstrate the benefits of the Bayesian method compared to it’s hierarchical frequentist counterparts. Results show a positive association between an actor’s own (α; β ) and her beliefs about average(α; β) in the population. The association between own preferences and the variance in beliefs about others’ preferences in the population, however, is curvilinear for α and insignificant for β. These results are partially consistent with the cone effect [1,2] which is described in detail below. Because in the Bayesian-Nash equilibrium concept, beliefs and own preferences are assumed to be independent, these results cast doubt on the application of the Bayesian-Nash equilibrium concept to experimental data.
Keywords: Bayesian statistics; Dictator Game; other-regarding preferences; beliefs Bayesian statistics; Dictator Game; other-regarding preferences; beliefs
This is an open access article distributed under the Creative Commons Attribution License (CC BY 3.0).
SciFeed

Share & Cite This Article

Further Mendeley | CiteULike
Export to BibTeX |
EndNote |
RIS
MDPI and ACS Style

Aksoy, O.; Weesie, J. Hierarchical Bayesian Analysis of Biased Beliefs and Distributional Other-Regarding Preferences. Games 2013, 4, 66-88.

View more citation formats

Related Articles

Article Metrics

For more information on the journal, click here

Comments

[Return to top]
Games EISSN 2073-4336 Published by MDPI AG, Basel, Switzerland RSS E-Mail Table of Contents Alert