Anger impairs strategic behavior: A Beauty-Contest based analysis

The frustration-aggression hypothesis posits that anger affects economic behaviour essentially by temporally changing individual social preferences and specifically attitudes towards punishment. Here, we test a different channel in an experiment where we externally induce anger to a subgroup of part...

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Bibliographic Details
Published inJournal of economic behavior & organization Vol. 213; pp. 128 - 141
Main Authors Castagnetti, Alessandro, Proto, Eugenio, Sofianos, Andis
Format Journal Article
LanguageEnglish
Published Elsevier B.V 01.09.2023
Subjects
Anger
Beauty-contest
Induced emotions
Strategic interactions
Anger
Induced emotions
Beauty-contest
D90
Strategic interactions
C92
D91
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Summary:The frustration-aggression hypothesis posits that anger affects economic behaviour essentially by temporally changing individual social preferences and specifically attitudes towards punishment. Here, we test a different channel in an experiment where we externally induce anger to a subgroup of participants (following a standard procedure that we verify by using a novel method of textual analysis). We show that anger can impair the capacity to think strategically in a beauty-contest game, in a pre-registered experiment. Angry participants choose numbers further away from the best response level and earn significantly lower profits. Using a finite mixture model, we show that anger increases the number of level-zero players by 9 percentage points, a percentage increase of more than 30%. Furthermore, with a second pre-registered experiment, we show that this effect is not common to all negative emotions. Sad participants do not play significantly further away from the best response level than the control group and sadness does not lead to more level-zero play.
ISSN:0167-2681
1879-1751
DOI:10.1016/j.jebo.2023.06.027