Anger Impairs Strategic Behavior: A Beauty-Contest Based Analysis

Castagnetti, Alessandro; Proto, Eugenio; Sofianos, Andis

Abstract

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

Citation

Castagnetti, A., Proto, E., & Sofianos, A. (2023). Anger Impairs Strategic Behavior: A Beauty-Contest Based Analysis. Journal of Economic Behavior and Organization, 213, 128-141. https://doi.org/10.1016/j.jebo.2023.06.027

• Journal Article Type: Article
• Acceptance Date: Jun 26, 2023
• Online Publication Date: Jul 22, 2023
• Publication Date: 2023-09
• Deposit Date: Aug 15, 2023
• Publicly Available Date: Aug 18, 2023
• Journal: Journal of Economic Behavior and Organization
• Print ISSN: 0167-2681
• Electronic ISSN: 2328-7616
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 213
• Pages: 128-141
• DOI: https://doi.org/10.1016/j.jebo.2023.06.027
• Public URL: https://durham-repository.worktribe.com/output/1717796