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The Role of Equality and Efficiency in Social Preferences

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  • Fehr, Ernst
  • Naef, Michael
  • Schmidt, Klaus M.

Abstract

Engelmann and Strobel (AER 2004) question the relevance of inequity aversion in simple dictator game experiments claiming that a combination of a preference for efficiency and a Rawlsian motive for helping the least well-off is more important than inequity aversion. We show that these results are partly based on a strong subject pool effect. The participants of the E&S experiments were undergraduate students of economics and business administration who self-selected into their field of study (economics) and learned in the first semester that efficiency is desirable. We show that for non-economists the preference for efficiency is much less pronounced. We also find a non-negligible gender effect indicating that women are more egalitarian than men. However, perhaps surprisingly, the dominance of equality over efficiency is unrelated to political attitudes.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 5368.

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Date of creation: Nov 2005
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Handle: RePEc:cpr:ceprdp:5368

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Keywords: inequity aversion; preferences for efficiency; social preferences;

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References

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  1. Fehr, Ernst & Schmidt, Klaus M., 2001. "Theories of Fairness and Reciprocity," Discussion Papers in Economics 14, University of Munich, Department of Economics.
  2. Fehr, Ernst & Schmidt, Klaus M., 1998. "A Theory of Fairness, Competition and Cooperation," CEPR Discussion Papers 1812, C.E.P.R. Discussion Papers.
  3. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March.
  4. Charness, Gary B & Rabin, Matthew, 2001. "Understanding Social Preferences With Simple Tests," University of California at Santa Barbara, Economics Working Paper Series qt0dc3k4m5, Department of Economics, UC Santa Barbara.
  5. Ernst Fehr & Klaus Schmidt, 2000. "Theories of Fairness and Reciprocity – Evidence and Economic Applications," CESifo Working Paper Series 403, CESifo Group Munich.
  6. Dirk Engelmann & Martin Strobel, 2004. "Inequality Aversion, Efficiency, and Maximin Preferences in Simple Distribution Experiments," American Economic Review, American Economic Association, vol. 94(4), pages 857-869, September.
  7. Guillaume R. Frechette & John H. Kagel & Steven Lehrer, 2000. "Bargaining in Legislatures: An Experimental Investigation of Open versus Closed Amendment Rules," Econometric Society World Congress 2000 Contributed Papers 1515, Econometric Society.
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Citations

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Cited by:
  1. Astri Drange Hole, 2013. "How do economists differ from others in distributive situations?," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 38, pages 4.
  2. Hörisch, Hannah, 2007. "Is the veil of ignorance only a concept about risk? An experiment," Discussion Papers in Economics 1362, University of Munich, Department of Economics.
  3. Kemp, Simon & Bolle, Friedel, 2013. "Are egalitarian preferences based on envy?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 45(C), pages 57-63.
  4. Dorothea Herreiner & Clemens Puppe, 2009. "Envy Freeness in Experimental Fair Division Problems," Theory and Decision, Springer, vol. 67(1), pages 65-100, July.
  5. Astri Drange Hole, 2008. "How do economists differ from others in distributive situations?," Labsi Experimental Economics Laboratory University of Siena 023, University of Siena.
  6. Jieyao Ding, 2012. "A Portfolio of Dilemmas: Experimental Evidence on Choice Bracketing in a Mini-Trust Game," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2012_06, Max Planck Institute for Research on Collective Goods.
  7. Chmura, Thorsten & Kube, Sebastian & Pitz, Thomas & Puppe, Clemens, 2005. "Testing (beliefs about) social preferences: Evidence from an experimental coordination game," Economics Letters, Elsevier, vol. 88(2), pages 214-220, August.
  8. Astri Drange Hole, 2013. "How do economists differ from others in distributive situations?," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 38, pages 4.

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