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Preferences, intentions, and expectation violations: A large-scale experiment with a representative subject pool

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  • Bellemare, Charles
  • Kröger, Sabine
  • van Soest, Arthur

Abstract

Abstract We specify and estimate an econometric model which separately identifies the effects of distributional preferences and penalizing unfair proposer behavior ("perceived intentions") on responder decisions in the ultimatum game. We allow the effects of perceived intentions to depend, among other things, on the subjective probabilities responders attach to the possible offers. The latter allows expectation violations to be a driving force for responder behavior. We estimate the model on a large representative sample from the Dutch population. We find that the relative importance of distributional preferences and perceived intentions depends significantly on the socio-economic characteristics of responders. Strong inequity aversion to the other player's disadvantage is found for lower educated and older respondents. Responders tend to punish more unequal offers made by proposers if they expect that unequal proposals are made less often.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 78 (2011)
Issue (Month): 3 (May)
Pages: 349-365

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Handle: RePEc:eee:jeborg:v:78:y:2011:i:3:p:349-365

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Related research

Keywords: Inequity aversion Intentions Subjective expectations;

References

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  1. James C. Cox & Daniel Friedman & Steven Gjerstad, 2006. "A Tractable Model of Reciprocity and Fairness," Experimental Economics Center Working Paper Series 2006-05, Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University.
  2. M. Rabin, 2001. "Incorporating Fairness into Game Theory and Economics," Levine's Working Paper Archive 511, David K. Levine.
  3. Bellemare, Charles & Kroger, Sabine, 2007. "On representative social capital," European Economic Review, Elsevier, vol. 51(1), pages 183-202, January.
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  8. Huck, Steffen & Müller, Wieland & Normann, Hans-Theo, 1999. "Stackelberg beats Cournot: On collusion and efficiency in experimental markets," SFB 373 Discussion Papers 1999,32, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
  9. Jacob K. Goeree & Charles A. Holt, . "Asymmetric Inequality Aversion and Noisy Behavior in Alternating-Offer Bargaining Games," Virginia Economics Online Papers 329, University of Virginia, Department of Economics.
  10. Bellemare, Charles & Kröger, Sabine, 2003. "On Representative Trust," SFB 373 Discussion Papers 2003,24, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
  11. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521747387, April.
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  14. Offerman, Theo, 2002. "Hurting hurts more than helping helps," European Economic Review, Elsevier, vol. 46(8), pages 1423-1437, September.
  15. Margin Dufwenberg & Georg Kirchsteiger, 2001. "A Theory of Sequential Reciprocity," Levine's Working Paper Archive 563824000000000090, David K. Levine.
  16. Henrich, Joseph & Boyd, Robert & Bowles, Samuel & Camerer, Colin & Fehr, Ernst & Gintis, Herbert (ed.), 2004. "Foundations of Human Sociality: Economic Experiments and Ethnographic Evidence from Fifteen Small-Scale Societies," OUP Catalogue, Oxford University Press, number 9780199262052, September.
  17. Lea, Stephen E. G. & Webley, Paul, 1997. "Pride in economic psychology," Journal of Economic Psychology, Elsevier, vol. 18(2-3), pages 323-340, April.
  18. Charles Bellemare & Sabine Kröger & Arthur van Soest, 2008. "Measuring Inequity Aversion in a Heterogeneous Population Using Experimental Decisions and Subjective Probabilities," Econometrica, Econometric Society, vol. 76(4), pages 815-839, 07.
  19. Manski, Charles F., 2002. "Identification of decision rules in experiments on simple games of proposal and response," European Economic Review, Elsevier, vol. 46(4-5), pages 880-891, May.
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Citations

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Cited by:
  1. Miguel A. Costa-Gomes & Steffen Huck & Georg Weizsäcker, 2010. "Beliefs and Actions in the Trust Game: Creating Instrumental Variables to Estimate the Causal Effect," Discussion Papers of DIW Berlin 969, DIW Berlin, German Institute for Economic Research.
  2. Slonim, Robert & Wang, Carmen & Garbarino, Ellen & Merrett, Danielle, 2012. "Opting-In: Participation Biases in the Lab," IZA Discussion Papers 6865, Institute for the Study of Labor (IZA).
  3. S. Bortolotti & M. Casari & F. Pancotto, 2013. "Norms of Punishment in the General Population," Working Papers wp898, Dipartimento Scienze Economiche, Universita' di Bologna.
  4. Pelligra, Vittorio & Stanca, Luca, 2013. "To give or not to give? Equity, efficiency and altruistic behavior in an artefactual field experiment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 46(C), pages 1-9.
  5. Alain Cohn & Ernst Fehr & Lorenz Goette, 2013. "Fair wages and effort provision: Combining evidence from the lab and the field," ECON - Working Papers 107, Department of Economics - University of Zurich.
  6. Kamas, Linda & Preston, Anne, 2012. "Distributive and reciprocal fairness: What can we learn from the heterogeneity of social preferences?," Journal of Economic Psychology, Elsevier, vol. 33(3), pages 538-553.

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