Guilt Aversion and Ambiguity in the Battle of Sexes Game

We analyze the effects of guilt aversion in the Battle of Sexes game by exploiting the theory of psychological games and the concept of psychological Nash equilibrium. We then examine the impact of ambiguity in the (second-order) beliefs by taking into account the theory of psychological games under ambiguity. Our results show that the sensitivity to guilt affects the mixed strategy equilibrium of the game, as a player might be willing to accept a lower expected utility to compensate for the other player’s disutility from guilt. In turn, a pessimistic attitude towards ambiguity makes this effect more evident, as it makes the disutility from guilt greater.