Relative Payoffs and Happiness: An Experimental Study
AbstractAre people concerned with their relative standing in a reference group? Do certain types care more about this than others? Little work has been done to identify underlying determinants for an inclination to make social comparisons and to explain variation across individuals. We investigate whether a person's level of happiness influences her taste for social comparisons and offer subjects choices in decision tasks where there is little or no difference in their monetary reward across choices, but where the material payoff for another person is strongly impacted. These decision tasks are calibrated to distinguish between a person's pure taste for achieving the social optimum, equality or preferences for advantageous relative standing. Self-reported happiness, as measured by scales derived from subjects' responses to questionnaires, is correlated with individual choices. Somewhat surprisingly, we find that most people appear to disregard relative payoffs, instead typically making choices resulting in higher social payoffs. While we do not find a strong correlation between happiness and difference aversion, we do observe that a willingness to lower another person's payoff below one's own (competitive preferences) seems correlated with unhappiness.
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Bibliographic InfoPaper provided by Econometric Society in its series Econometric Society World Congress 2000 Contributed Papers with number 1263.
Date of creation: 01 Aug 2000
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- Charness, Gary & Grosskopf, Brit, 2001. "Relative payoffs and happiness: an experimental study," Journal of Economic Behavior & Organization, Elsevier, vol. 45(3), pages 301-328, July.
- 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.
- Charness, Gary B & Grosskopf, Brit, 2000. "Relative Payoffs And Happiness: An Experimental Study," University of California at Santa Barbara, Economics Working Paper Series qt8389x8z2, Department of Economics, UC Santa Barbara.
- A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
- A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
- B49 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Other
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
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