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Understanding Social Preferences with Simple Tests

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  • Charness, Gary
  • Rabin, Matthew

Abstract

Departures from self-interest in economic experiments have recently inspired models of “social preferencesâ€. We design a range of simple experimental games that test these theories more directly than existing experiments. Our experiments show that subjects are more concerned with increasing social welfare—sacrificing to increase the payoffs for all recipients, especially low-payoff recipients—than with reducing differences in payoffs (as supposed in recent models). Subjects are also motivated by reciprocity: They withdraw willingness to sacrifice to achieve a fair outcome when others are themselves unwilling to sacrifice, and sometimes punish unfair behavior.

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Bibliographic Info

Paper provided by Department of Economics, Institute for Business and Economic Research, UC Berkeley in its series Department of Economics, Working Paper Series with number qt3d04q5sm.

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Date of creation: 02 Jun 2002
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Handle: RePEc:cdl:econwp:qt3d04q5sm

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Keywords: difference aversion; fairness; inequity aversion; social welfare; non-ultimatum games; reciprocal fairness; social preferences; ultimatum games;

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  1. McCabe, Kevin A. & Rigdon, Mary L. & Smith, Vernon L., 2003. "Positive reciprocity and intentions in trust games," Journal of Economic Behavior & Organization, Elsevier, vol. 52(2), pages 267-275, October.
  2. Armin Falk & Urs Fischbacher, 2001. "A Theory of Reciprocity," CESifo Working Paper Series 457, CESifo Group Munich.
  3. Gary Charness & Matthew Rabin, 2001. "Social Preferences: Some Simple Tests and a New Model," General Economics and Teaching 0012002, EconWPA.
  4. Armin Falk & Ernst Fehr & Urs Fischbacher, 2003. "On the Nature of Fair Behavior," Economic Inquiry, Western Economic Association International, vol. 41(1), pages 20-26, January.
  5. Bolton, G.E. & Brandts, J. & Ockenfels, A., 1997. "Measuring Motivations for the Reciprocal Responses Observed in a Simple Dilemma Game," UFAE and IAE Working Papers 400.97, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  6. Dufwenberg, Martin & Kirchsteiger, Georg, 2004. "A theory of sequential reciprocity," Games and Economic Behavior, Elsevier, vol. 47(2), pages 268-298, May.
  7. Gary E. Bolton & Jordi Brandts & Elena Katok, 2000. "How strategy sensitive are contributions?," Economic Theory, Springer, vol. 15(2), pages 367-387.
  8. Gary Charness & Ernan Haruvy, 1999. "Altruism, equity and reciprocity in a gift-exchange experiment: An encompassing approach," Economics Working Papers 368, Department of Economics and Business, Universitat Pompeu Fabra.
  9. Gary Charness & Brit Grosskopf, 1999. "Relative payoffs and happiness: An experimental study," Economics Working Papers 436, Department of Economics and Business, Universitat Pompeu Fabra, revised Jan 2000.
  10. M. Rabin, 2001. "Incorporating Fairness into Game Theory and Economics," Levine's Working Paper Archive 511, David K. Levine.
  11. Andreoni, James & Brown, Paul M. & Vesterlund, Lise, 2002. "What Makes an Allocation Fair? Some Experimental Evidence," Games and Economic Behavior, Elsevier, vol. 40(1), pages 1-24, July.
  12. Blount, Sally, 1995. "When Social Outcomes Aren't Fair: The Effect of Causal Attributions on Preferences," Organizational Behavior and Human Decision Processes, Elsevier, vol. 63(2), pages 131-144, August.
  13. Berg Joyce & Dickhaut John & McCabe Kevin, 1995. "Trust, Reciprocity, and Social History," Games and Economic Behavior, Elsevier, vol. 10(1), pages 122-142, July.
  14. James Andreoni, 2001. "Giving According to GARP," Theory workshop papers 339, UCLA Department of Economics.
  15. Fehr, Ernst & Schmidt, Klaus M., 1998. "A Theory of Fairness, Competition and Cooperation," CEPR Discussion Papers 1812, C.E.P.R. Discussion Papers.
  16. Brandts, Jordi & Sola, Carles, 2001. "Reference Points and Negative Reciprocity in Simple Sequential Games," Games and Economic Behavior, Elsevier, vol. 36(2), pages 138-157, August.
  17. Croson, Rachel T. A., 1999. "The Disjunction Effect and Reason-Based Choice in Games, , , , , , , , , , , , ," Organizational Behavior and Human Decision Processes, Elsevier, vol. 80(2), pages 118-133, November.
  18. Theo Offerman, 1999. "Hurting hurts more than Helping helps: The Role of the Self-serving Bias," Tinbergen Institute Discussion Papers 99-018/1, Tinbergen Institute.
  19. Timothy N. Cason & Vai-Lam Mui, 1998. "Social Influence in the Sequential Dictator Game," Monash Economics Working Papers archive-37, Monash University, Department of Economics.
  20. Gary E. Bolton & Axel Ockenfels, 1998. "Strategy and Equity: An ERC Analysis of the Guth-van Damme Game," Levine's Working Paper Archive 2060, David K. Levine.
  21. Dufwenberg, Martin & Gneezy, Uri, 2000. "Measuring Beliefs in an Experimental Lost Wallet Game," Games and Economic Behavior, Elsevier, vol. 30(2), pages 163-182, February.
  22. Engelmann,Dirk & Strobel,Martin, 2002. "Inequality Aversion, Efficiency, and Maximin Preferences in Simple Distribution Experiments," Research Memorandum 015, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
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