Pride and Shame

Understanding why people respect social norms and exhibit pro-social behavior, many times contrary to their material interest, is an important topic in social science. This paper studies the role of emotions such as pride and shame. Based on various psychological literature, we argue that pride and shame are (i) external (ii) context dependent and (iii) relative feelings. In order to accomodate those psychological matters, we study a preference relation over sets and interpret as a following two-stage decision making process. In the ex-ante stage, the decision maker privately chooses a set of lotteries. In contrast, in the ex-post stage, the decision maker publicly chooses a lottery from the chosen set of available lotteries. Given a reference behavior, our axioms yield a representation that identifies the individual’s selfish utility function, social norm function, benefit of pride and cost of shame. Compare with the reference behavior, the decision maker feels pride if she acts prosocially and feels shame if she acts antisocially and if those actions are publicly observed. ∗I would like to thank my adviser professor Hidehiko Ichimura for encouragement and support. I would like to also thank Akihiko Matsui, Daisuke Oyama, Kazuya Kamiya, Norio Takeoka and Satoru Takahashi for useful comments. All remaining errors are my own.