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The impact of relative position and returns on sacrifice and reciprocity: an experimental study using individual decisions

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  • Jordi Brandts
  • Enrique Fatas
  • Ernan Haruvy
  • Francisco Lagos

Abstract

We present a comprehensive experimental design that makes it possible to characterize other-regarding preferences and their relationship to the decision maker’s relative position. Participants are faced with a large number of decisions involving variations in the trade-offs between own and other’s payoffs, as well as in other potentially important factors like the decision maker’s relative position. We find that: (1) choices are responsive to the cost of helping and hurting others; (2) The weight a decision maker places on others’ monetary payoffs depends on whether the decision maker is in an advantageous or disadvantageous relative position; and (3) We find no evidence of reciprocity of the type linked to menu-dependence. The results of a mixture-model estimation show considerable heterogeneity in subjects’ motivations and confirm the absence of reciprocal motives. Pure selfish behavior is the most frequently observed behavior. Among the subjects exhibiting social preferences, social-welfare maximization is the most frequent, followed by inequality-aversion and by competitiveness. Copyright The Author(s) 2015

Suggested Citation

  • Jordi Brandts & Enrique Fatas & Ernan Haruvy & Francisco Lagos, 2015. "The impact of relative position and returns on sacrifice and reciprocity: an experimental study using individual decisions," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 45(3), pages 489-511, October.
    • Handle: RePEc:spr:sochwe:v:45:y:2015:i:3:p:489-511
    DOI: 10.1007/s00355-014-0818-7
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    3. Gago, Andrés, 2021. "Reciprocity and uncertainty: When do people forgive?," Journal of Economic Psychology, Elsevier, vol. 84(C).

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    More about this item

    Keywords

    Experiments; Social preferences; Reciprocity; Difference aversion; C70; C90; D63; D64;
    All these keywords.

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers

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