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Piercing the “Payoff Function” Veil: Tracing Beliefs and Motives

Author

Listed:
  • Guidon Fenig

    (Department of Economics, University of Ottawa, Canada)

  • Giovanni Gallipoli

    (Vancouver School of Economics, UBC, Canada; Rimini Centre for Economic Analysis)

  • Yoram Halevy

    (Department of Economics, University of Toronto, Canada; Hebrew University of Jerusalem, Israel)

Abstract
This paper develops an experimental methodology that allows the identification of decision-making processes in interactive settings using tracking of choice-process data. This non-intrusive and indirect approach provides essential information for the characterization of beliefs. The analysis reveals significant heterogeneity, which is reduced to two broad types, differentiated by the importance of pecuniary rewards in agents' payoff function. Most subjects choose actions close to maximizing monetary rewards, by best responding to beliefs. Others are able to identify these actions, but choose to systematically deviate from them – exhibiting either altruistic or competitive motives.

Suggested Citation

  • Guidon Fenig & Giovanni Gallipoli & Yoram Halevy, 2023. "Piercing the “Payoff Function” Veil: Tracing Beliefs and Motives," Working Paper series 23-02, Rimini Centre for Economic Analysis.
    • Handle: RePEc:rim:rimwps:23-02
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    References listed on IDEAS

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    More about this item

    Keywords

    non-choice data; typology; tracking; response-time; coordination; public goods; complementarity; altruism; joy of giving; competitiveness; joy of winning; complexity; laboratory experiment;
    All these keywords.

    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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