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Testing the Analytical Framework of Other-Regarding Preferences

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Author Info

  • M. Vittoria Levati
  • Aaron Nicholas
  • Birendra Rai

Abstract

This paper aims to assess the empirical validity of the overall theoretical framework of other-regarding preferences. We focus on those preference axioms that are common to all the prominent theories of outcome-based other-regarding preferences. This common set of preference axioms leads to a testable implication: the strict preference ranking of self over a _nite number of alternatives lying on any straight line in the space of material payoffs to self and other will be single-peaked. We elicit the strict preference rankings of experimental subjects in variants of dictator and trust games using a mechanism that induces truthful revelation under quite weak assumptions. The data allow us to document the extent of single-peakedness and identify who violates single-peakedness. Potential reasons for violations of single-peakedness are delineated and the implications of our findings for theoretical modeling of other-regarding preferences are discussed.

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File URL: http://www.buseco.monash.edu.au/eco/research/papers/2011/2611testinganalyticallevatinicholasrai.pdf
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Bibliographic Info

Paper provided by Monash University, Department of Economics in its series Monash Economics Working Papers with number 26-11.

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Length: 34 pages
Date of creation: Sep 2011
Date of revision:
Handle: RePEc:mos:moswps:2011-26

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Related research

Keywords: Other-regarding preferences; expected utility theory; single-peaked preferences; Experiments;

References

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Cited by:
  1. Nejat Anbarci & Nick Feltovich, 2012. "How responsive are people to changes in their bargaining position? Earned bargaining power and the 50–50 norm," Economics Series 2012_6, Deakin University, Faculty of Business and Law, School of Accounting, Economics and Finance.

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