Social vs. risk preferences under the veil of ignorance
AbstractThis paper reports experimental evidence from a Dictator Game experiment in which subjects choose repeatedly one out of four options involving a pair of fixed monetary prizes, one for them, one for another anonymously matched subject. In some sessions, player position (i.e. the identity of the best paid agent, constant across all options) is known in advance before subjects have to make their decision; in other sessions subjects choose “under the veil of ignorance”, not knowing to which player position they will be eventually assigned. We also collect evidence from additional sessions in which the same options correspond to binary lotteries, in which subjects may win the high or the low prize, but their decisions do not affect other participants. We frame subjects’ decisions within the realm of a simple mean-variance utility maximization problem, where the parameter associated to the variance is interpreted, depending on the treatment conditions, as a measure of pure risk aversion, pure inequality aversion, or some combination of the two. We also condition our estimates to subjects’ individual socio-demographic characteristics.
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Bibliographic InfoPaper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie AD with number 2011-07.
Length: 19 pages
Date of creation: Mar 2011
Date of revision:
Publication status: Published by Ivie
Keywords: dictator games; social preferences; risk preferences; functional identification.;
Find related papers by JEL classification:
- D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-04-23 (All new papers)
- NEP-EVO-2011-04-23 (Evolutionary Economics)
- NEP-EXP-2011-04-23 (Experimental Economics)
- NEP-GTH-2011-04-23 (Game Theory)
- NEP-UPT-2011-04-23 (Utility Models & Prospect Theory)
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