- Emotional Hazard in a Power-to-Take Experiment
- Economic Journal
- Pages (from-to)
- Document type
- Faculty of Economics and Business (FEB)
- Amsterdam School of Economics Research Institute (ASE-RI)
In this experimental study of a two player power-to-take game, players earn an income in an individual effort task preceding the game. The game has two stages. First, one player can claim any part of the other s income take rate. Then, the latter player can respond by destroying own income. We focus on how emotions influence responses and show:1 a higher take rate increases (decreases) intensity of negative (positive) emotions;2 negative emotions drive destruction;3 at high emotional intensity, responders destroy everything;4 expectations affect the probability of punishment. Emotional hazard is identified as a new source of efficiency costs.
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