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Reaching for the Stars: An Experimental Study of the Consumption Value of Social Approval

Author

Listed:
  • Matthias Greiff

    (University of Giessen)

  • Fabian Paetzel

    (University of Bremen)

Abstract

We present a theoretical model of a linear public good game in which heterogeneous players express social approval after observing contributions. The model explains how social approval is expressed and predicts positive contributions if subjects have a preference for social approval. Using a controlled laboratory experiment we test our model. In the experiment, subjects conduct computerized tasks that require substantial effort resulting in endowments from which contributions can be made to a linear public good. After observing others’ contributions subjects express social approval. Our main hypothesis is that subjects have a preference for social approval so that the expression of social approval will increase contributions, even if reputation building is impossible. We vary the information available to subjects and investigate how this affects the expression of social approval and individual contributions. Our main finding is that the expression of social approval significantly increases contributions. However, the increase in contributions is smaller if additional information is provided, suggesting that social approval is more effective if subjects receive a noisy signal about others’ contributions.

Suggested Citation

  • Matthias Greiff & Fabian Paetzel, 2012. "Reaching for the Stars: An Experimental Study of the Consumption Value of Social Approval," MAGKS Papers on Economics 201208, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    • Handle: RePEc:mar:magkse:201208
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    References listed on IDEAS

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    Cited by:

    1. Matthias Greiff & Fabian Paetzel, 2012. "The Importance of Knowing Your Own Reputation," MAGKS Papers on Economics 201236, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    2. Schmitt, Carina & Obinger, Herbert, 2012. "Policy diffusion and social rights in advanced democracies 1960-2000," Working papers of the ZeS 02/2012, University of Bremen, Centre for Social Policy Research (ZeS).
    3. Matthias Greiff, 2013. "Affective Social Ties without the Need to Belong?," Rationality, Markets and Morals, Frankfurt School Verlag, Frankfurt School of Finance & Management, vol. 4(64), May.

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    More about this item

    Keywords

    Experimental Economics; Linear Public Good Games; Non-monetary Incentives; Social Approval;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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