Frustration and Anger in Games

Frustration, anger, and aggression have important consequences for economic and social behavior, concerning for example monopoly pricing, contracting, bargaining, tra¢ c safety, violence, and politics. Drawing on insights from psychology, we develop a formal approach to exploring how frustration and anger, via blame and aggression, shape interaction and outcomes in economic settings. KEYWORDS: frustration, anger, blame, belief-dependent preferences, psychological games JEL codes: C72, D03