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Peer Effects In Pro-Social Behavior: Social Norms Or Social Preferences?

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  • Simon Gächter
  • Daniele Nosenzo
  • Martin Sefton

Abstract

We compare social preference and social norm based explanations for peer effects in a three-person gift-exchange game experiment. In the experiment a principal pays a wage to each of two agents, who then make effort choices sequentially. In our baseline treatment we observe that the second agent's effort is influenced by the effort choice of the first agent, even though there are no material spillovers between agents. This peer effect is predicted by a model of distributional social preferences (Fehr-Schmidt, 1999). As we show from a norms-elicitation experiment, it is also consistent with social norms compliance. A conditional logit investigation of the explanatory power of payoff inequality and elicited norms finds that the second agent's effort can be best explained by the social preferences model. In further treatments with modified games we find that the presence/strength of peer effects changes as predicted by the social preferences model. As with the baseline treatment, a conditional logit analysis favors an explanation based on social preferences, rather than social norms following for these treatments. Our results suggest that, in our context, the social preferences model provides a parsimonious explanation for the observed peer effect.

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File URL: http://hdl.handle.net/10.1111/jeea.2013.11.issue-3
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Bibliographic Info

Article provided by European Economic Association in its journal Journal of the European Economic Association.

Volume (Year): 11 (2013)
Issue (Month): 3 (06)
Pages: 548-573

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Handle: RePEc:bla:jeurec:v:11:y:2013:i:3:p:548-573

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Citations

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Cited by:
  1. Burks, Stephen V. & Krupka, Erin L., 2011. "A Multi-Method Approach to Identifying Norms and Normative Expectations within a Corporate Hierarchy: Evidence from the Financial Services Industry," IZA Discussion Papers 5818, Institute for the Study of Labor (IZA).
  2. Amrei M. Lahno & Marta Serra-Garcia, 2012. "Peer Effects in Risk Taking," CESifo Working Paper Series 4057, CESifo Group Munich.
  3. Montizaan Raymond & Cörvers Frank & Grip Andries de & Dohmen Thomas, 2012. "Negative reciprocity and retrenched pension rights," ROA Research Memorandum 015, Maastricht University, Research Centre for Education and the Labour Market (ROA).
  4. Spiros Bougheas & Jeroen Nieboer & Martin Sefton, 2013. "Risk-taking in social settings: Group and peer effects," Discussion Papers 2013-04, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  5. Zizzo, Daniel John, 2013. "Claims and confounds in economic experiments," Journal of Economic Behavior & Organization, Elsevier, vol. 93(C), pages 186-195.
  6. Tobias Regner & Gerhard Riener, 2011. "Motivational Cherry Picking," Jena Economic Research Papers 2011-029, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  7. Daniele Nosenzo, 2013. "Pay Secrecy And Effort Provision," Economic Inquiry, Western Economic Association International, vol. 51(3), pages 1779-1794, 07.
  8. Christian Thoeni & Simon Gaechter, 2011. "Peer Effects and Social Preferences in Voluntary Cooperation," Discussion Papers 2011-09, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.

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