Recent research has cast some doubt on the general validity of outcome-basedmodels of social preferences. We develop a model based on cognitive dissonance thatfocuses on the importance of self-image. An experiment (a dictator game variant)tests the model.First, we nd that subjects whose choices...

The higher our aspirations, the higher the probability that we have toadjust them downwards when forming more realistic expectations later on.This paper shows that the costs induced by high aspirations are not trivial.We first develop a theoretical framework to identify the factors that...