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We analyze vertical product differentiation in a model where a good's quality is unobservable to buyers before purchase, a continuum of quality levels is technologically feasible, and minimum quality is supplied under competitive conditions. After purchase the true quality of the good is...
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on what others think about their thinking. Drawing on a controlled experiment, we find that a negative emotion (fear …) deepens the tendency to engage in iterative reasoning compared with a positive emotion (amusement). Moreover, neutral emotions … that emotions help regulate iterative reasoning, that is, their tendency to not only reflect on what others think, but also …
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primarily interested in how emotions influenceresponder behavior. Our findings are the following. (1) A higher take … happiness. Sincenegative emotions are experienced as painful, there is direct hedonicimpact. (2) Irritation and contempt drive … probabilityof punishment but not on the intensity of experienced emotion. We explainthis last result in terms of norm …
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