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

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  • Simon Gaechter

    ()
    (University of Nottingham)

  • Daniele Nosenzo

    (University of Nottingham)

  • Martin Sefton

    (University of Nottingham)

Abstract

We compare social preference and social norm based explanations for peer effects in a threeperson gift-exchange game experiment. In the experiment a principal pays a wage to each of two agents, who then make effort choices sequentially. We find that both agents supply more effort in response to a higher own wage, even though supplying minimal effort maximizes own-earnings. 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 consistent with inequity aversion and we also show, by conducting an experiment to measure social norms, that it is consistent with social norm compliance. We design a second treatment where social norm compliance, but not inequity aversion, predicts this peer effect. In this treatment we do not observe peer effects. Our results suggest that, in our context, inequity aversion provides a parsimonious explanation for observed peer effects.

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Bibliographic Info

Paper provided by The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham in its series Discussion Papers with number 2010-23.

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Date of creation: Dec 2010
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Handle: RePEc:cdx:dpaper:2010-23

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Keywords: peer effects; social influence; gift-exchange; experiment; social preferences; inequity aversion; measuring social norms;

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References

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Citations

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Cited by:
  1. Daniele Nosenzo, 2012. "Pay Secrecy and effort provision," Discussion Papers 2012-13, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  2. Lahno, Amrei M. & Serra-Garcia, Marta, 2012. "Peer Effects in Risk Taking," Discussion Papers in Economics 14309, University of Munich, Department of Economics.
  3. Spiros Bougheas & Jeroen Nieboer & Martin Sefton, 2013. "Risk Taking in Social Settings: Group and Peer Effects," Discussion Papers 2013-01, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  4. 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).
  5. Zizzo, Daniel John, 2013. "Claims and confounds in economic experiments," Journal of Economic Behavior & Organization, Elsevier, vol. 93(C), pages 186-195.
  6. 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.
  7. Regner, Tobias & Riener, Gerhard, 2012. "Motivational cherry picking," DICE Discussion Papers 68, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
  8. Stephen V. Burks & Erin L. Krupka, 2012. "A Multimethod Approach to Identifying Norms and Normative Expectations Within a Corporate Hierarchy: Evidence from the Financial Services Industry," Management Science, INFORMS, vol. 58(1), pages 203-217, January.

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