Tobias Regner and Nicole S. Harth

We analyse two types of belief-dependant models of social preferences: guilt aversion and reciprocity. Our experimental data confirm their predictions. Both second-order beliefs and participants' dispositions (to guilt/reciprocity) are relevant for the decisions taken. Second-order beliefs appear to have an inverse U-shaped effect on the extent of pro-social behaviour. We also use a heterogeneous reference point based on trustees' first-order beliefs in order to assess perceived kindness of the trustor, and find that the difference between actual transfer and beliefs matters. The effect of disappointment (lower transfer than expected) is more pronounced than the one of a positive surprise.

Other-regarding behaviour: Testing guilt- and reciprocity-based models