Management Summary Research Study „Guilt and Fairness“
This study makes a substantial theoretical and empirical contribution to the economics of trust by addressing a longstanding question at the intersection of behavioral and experimental economics: whether trustworthiness is driven primarily by guilt aversion or by inequity aversion. Published in Games and Economic Behavior, the paper develops a theory-driven identification strategy that derives opposite comparative-static predictions from the two models and tests them in a purpose-built laboratory experiment. A central methodological innovation is the reformulation of guilt-aversion predictions so that they no longer rely directly on second-order beliefs, thereby overcoming a major identification problem in the literature and allowing for a cleaner comparison between belief-dependent and outcome-based motives.
Using a modified Trust Minigame with 128 participants, the study shows that increasing the trustor’s stakes sharply reduces trust, trustworthiness, and associated beliefs: trustee cooperation falls from 44.1% to 20.3%, while trustor cooperation declines from 34.4% to 14.1%. The evidence strongly supports inequity aversion as the dominant mechanism in this setting. The broader implication is that ex-ante inequality can systematically erode cooperation, with direct relevance for principal-agent relations, organizational design, and institutions that rely on trust under asymmetric stakes.
Target groups of stakeholders: Academic economists; research institutions; policymakers working on inequality and social trust; organizations designing incentives in high-stakes principal-agent environments; public-facing stakeholders interested in how inequality affects cooperation and institutional performance.
Citation: Stringhi, A. (2026). Guilt and fairness. Games and Economic Behavior, 158, 191–218. https://doi.org/10.1016/j.geb.2026.03.008