Title: The interplay of reciprocity propensity and inequality aversion in two-person games

Abstract: 

Economic normative models assume that economic actors are fully rational and selfish while recent studies acknowledge the emotional influence of an economic decision and call for further investigation of biases in decision making. Most decisions involve multiple actors who make decisions following a sequential path as reflected by decision trees; this contingency makes a call for the game theory contribution in the economic decision field. Two-person games are widely used to represent a typical framework of economic decisions. This study aims at further investigating psychological biases affecting decisions in a two-person sequential game. So far similar studies have focused on the principal (or first mover) behavior without paying much attention to the second mover. We aim to unveil how reciprocating propensity and inequity aversion issues influence the second mover’s decision. We designed and conducted a series of laboratory experiments to let just one of the potential biases act in each part of each treatment. This experiment design allows for examining the hypothesized hierarchical level of intervention by reciprocity and inequality aversion. Experimental results support the dominance of inequality aversion as the main driver in reciprocal behavior and suggest a refinement of the idea of a triggering hierarchy of decision biases.

Lecturer: Giovanna Lo Nigro

Date/Time: 16:00 – 17:00PM, 28 Dec, 2020

Online Platform: ZOOM Meeting：763 086 2328； Passcode：nuaacem

Brief introduction of the lecturer: 

Giovanna Lo Nigro is a professor of engineering at the University of Palermo in Italy and a member of the IJPE journal editorial board. Her research and teaching interests mainly include sharing economy, risk selection and decision-making innovation. She has published many papers in famous journals such as IJPE and EJOR, and has made great achievements in the fields of management science and decision economics.