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Web End = Exp Econ (2016) 19:480499
DOI 10.1007/s10683-015-9450-3
ORIGINAL PAPER
Yohanes E. Riyanto1 Jianlin Zhang2
Received: 26 August 2014 / Revised: 26 May 2015 / Accepted: 2 June 2015 / Published online: 10 June 2015 Economic Science Association 2015
Abstract Standard economic theories assume that people are self-interested and their wellbeing solely dependent on their own material gains or losses. Unless they have an impact on monetary payoffs, the perceptions of anonymous individuals are irrelevant to peoples decision making. However, a large body of research in sociology and social psychology demonstrates that self-identity is developed through ones understanding of how one is perceived by others. Using (Cooleys, Human nature and the social order, 1964) concept of the looking-glass self as a framework, we evaluate experimentally whether or not people care about the imputed judgment of anonymous others arising from their imagination of their perceptions. We implemented variants of the BeckerDeGrootMarschak mechanism to elicit the monetary value attached to the perceptions by participants. In one variant, only nonnegative bids were allowed, while in another, negative bids were allowed. We show that in an environment in which the perceptions of others are only conveyed to participants anonymously and privately, self-interested individuals exhibited strong negative perception avoidance even though the perceptions have no impact on their monetary payoff. The participants were willing to spend a
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& Jianlin Zhang zhangjianlin@sim.edu.sg
Yohanes E. Riyanto yeriyanto@ntu.edu.sg
1 Division of Economics, School of Humanities and Social Sciences, Nanyang Technological
University, 14 Nanyang Drive HSS 04-83, Singapore 637332, Singapore
2 Global Education, Singapore Institute of Management, 461 Clementi Road, Singapore 599491, Singapore
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signicant amount in order to avoid conrming the supposedly negative perception. Thus, for them, ignorance was truly bliss. We also show that, in the absence of the audience effect, the...