A Note on guilt aversion 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. Then we 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 some equilibrium of the game since a player might be willing to accept a lower expected utility to compensate the other’s disutility from guilt. Ambiguity, in turn, makes this effect more evident as it makes it greater the disutility from guilt.