"Testing belief-dependent models"

Tobias Regner and Nicole S. Harth

We analyse two types of belief-dependent 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 back transfer in a standard trust game. 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.

Testing belief-dependent models