Avoiding the Cost of your Conscience: Belief Dependent Preferences and Information Acquisition

Speaker: Dr Alice Soldà

Affiliation: Ghent University

Online via Zoom: https://uqz.zoom.us/j/83265075806

Abstract

Pro-social individuals typically face a trade-off between their monetary incentives and psychological 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 acquire information about others' expectations in a self-serving way. We present a model of endogenous information acquisition and test our theoretical predictions in an online experiment based on a modified trust-game in which the second-mover is uncertain about the first-mover's expectations. Our experimental design enables to (i) identify participants with belief-based preferences and (ii) investigate their information acquisition strategy. Consistent with our predictions for subjective belief-dependent preferences, we find that most individuals classified as belief-dependent strategically select their source of information to avoid the cost of their conscience.

About the presenter's meeting

If you would like to meet with Dr Soldà on Thursday 13th October, please contact: Dr Andrea La Nauze