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Why did he do that? Using counterfactuals to study the effect of intentions in extensive form games

Published online by Cambridge University Press:  14 March 2025

Yola Engler*
Affiliation:
School of Economics and Finance, Queensland University of Technology, 2 George Street Brisbane, Australia
Rudolf Kerschbamer*
Affiliation:
Department of Economics, University of Innsbruck, Universitaetsstrasse 15 Innsbruck, Australia
Lionel Page*
Affiliation:
School of Economics and Finance, Queensland University of Technology, 2 George Street Brisbane, Australia

Abstract

We investigate the role of intentions in two-player two-stage games. For this purpose we systematically vary the set of opportunity sets the first mover can choose from and study how the second mover reacts not only to opportunities of gains but also of losses created by the choice of the first mover. We find that the possibility of gains for the second mover (generosity) and the risk of losses for the first mover (vulnerability) are important drivers for second mover behavior. On the other hand, efficiency concerns and an aversion against violating trust seem to be far less important motivations. We also find that second movers compare the actual choice of the first mover and the alternative choices that would have been available to him to allocations that involve equal material payoffs.

Type
Original Paper
Copyright
Copyright © 2017 Economic Science Association

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Footnotes

Electronic supplementary material The online version of this article (doi:https://doi.org/10.1007/s10683-017-9522-7) contains supplementary material, which is available to authorized users.

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