Guilt aversion and peer effects in crime: experimental and empirical evidence from Bangladesh

I conducted an artefactual field experiment to identify whether guilt reduces crime, and how the crime reduction effects of guilt change due to peer effects. Guilt aversion predicts the occurrence of peer effects caused by changes in guilt sensitivity and belief. I found supporting evidence of changes in belief. My experiment is novel in that it develops an approach to elicit guilt sensitivity. Using this data, I show behavioural patterns consistent with guilt aversion but not with pure altruism or trustworthiness. The external validity of guilt sensitivity is also shown.