Optimal Individual Decisions with a Psycho-materialistic Utility Function |
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Authors: | Matteo Migheli |
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Institution: | 1. Department of Economics and Statistics ‘Cognetti de Martiis’ Lungodora Siena, University of Torino, Torino, Italy;2. CeRP – Collegio Carlo Alberto, Moncalieri, Italy |
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Abstract: | This paper proposes a theoretical model aimed at interpreting the outcome of some games. It is often observed that players do not play the Nash equilibrium, when their utility is modelled on their payoff only. However, other models which include psychological variables fail to describe the behaviours observed. Here I propose a utility function which encompasses both monetary and psychological payoffs in such a way that the predictions fit the actual decisions of the players observed in experiments. |
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Keywords: | Preferences Nash equilibrium moral sentiments |
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