Does Entitlement Crowd Out Efficiency or Equality Seeking? - Selling the Roles in Generosity Game Experiments -
AbstractIn generosity games, one agreement payoff is exogenously given, whereas the other is endogenously determined by the proposer's choice of the "pie" size. This has been shown to induce pie choices which are either efficiency or equality seeking. In our experiment, before playing the generosity game, participants are asked to buy their role via a random price mechanism. This should entitle them to exploit the chances which their role provides and at the same time avoid the selection bias of competitive auctions. We find that entitlement crowds out equality seeking and strengthens efficiency seeking. Interpreting participants' willingness to pay as an aspiration level of how much they want to earn, our design further allows us to test for satisficing behavior. Indeed, we find evidence for satisficing behavior in the data.
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Bibliographic InfoPaper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2010-091.
Date of creation: 14 Dec 2010
Date of revision:
Publication status: Published as "Entitlement and the efficiency-equality trade-off: an experimental study" by Agnes Bäker, Werner Güth, Kerstin Pull, Manfred Stadler, in: Theory and Decision March 2013,
Entitlement; Generosity Game; Efficiency Seeking; Inequity Aversion; Satisficing;
Find related papers by JEL classification:
- C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- D03 - Microeconomics - - General - - - Behavioral Economics; Underlying Principles
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-12-23 (All new papers)
- NEP-EVO-2010-12-23 (Evolutionary Economics)
- NEP-EXP-2010-12-23 (Experimental Economics)
- NEP-LTV-2010-12-23 (Unemployment, Inequality & Poverty)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Werner Güth & M. Vittoria Levati & Matteo Ploner, 2009. "Making the World a better Place: Experimental evidence from the generosity Game," Jena Economic Research Papers 2009-071, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
- Werner Güth & Martin G. Kocher, 2013.
"More than thirty years of ultimatum bargaining experiments: Motives, variations, and a survey of the recent literature,"
Jena Economic Research Papers
2013-035, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
- Werner Güth & Martin G. Kocher, 2013. "More than Thirty Years of Ultimatum Bargaining Experiments: Motives, Variations, and a Survey of the Recent Literature," CESifo Working Paper Series 4380, CESifo Group Munich.
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