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Peer Effects In Pro-Social Behavior: Social Norms Or Social Preferences?

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  • Simon Gaechter

    ()
    (University of Nottingham)

  • Daniele Nosenzo

    (University of Nottingham)

  • Martin Sefton

    (University of Nottingham)

Abstract

We compare social preference and social norm based explanations for peer effects in a threeperson gift-exchange game experiment. In the experiment a principal pays a wage to each of two agents, who then make effort choices sequentially. We find that both agents supply more effort in response to a higher own wage, even though supplying minimal effort maximizes own-earnings. In our baseline treatment we observe that the second agent's effort is influenced by the effort choice of the first agent, even though there are no material spillovers between agents. This peer effect is consistent with inequity aversion and we also show, by conducting an experiment to measure social norms, that it is consistent with social norm compliance. We design a second treatment where social norm compliance, but not inequity aversion, predicts this peer effect. In this treatment we do not observe peer effects. Our results suggest that, in our context, inequity aversion provides a parsimonious explanation for observed peer effects.

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Bibliographic Info

Paper provided by The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham in its series Discussion Papers with number 2010-23.

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Date of creation: Dec 2010
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Handle: RePEc:not:notcdx:2010-23

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Fax: (0115) 951 4159
Web page: http://www.nottingham.ac.uk/economics/cedex/
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Keywords: peer effects; social influence; gift-exchange; experiment; social preferences; inequity aversion; measuring social norms;

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References

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Citations

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Cited by:
  1. Amrei M. Lahno & Marta Serra-Garcia, 2012. "Peer Effects in Risk Taking," CESifo Working Paper Series 4057, CESifo Group Munich.
  2. Montizaan, Raymond & Cörvers, Frank & de Grip, Andries & Dohmen, Thomas, 2012. "Negative Reciprocity and Retrenched Pension Rights," IZA Discussion Papers 6955, Institute for the Study of Labor (IZA).
  3. Daniele Nosenzo, 2013. "Pay Secrecy And Effort Provision," Economic Inquiry, Western Economic Association International, vol. 51(3), pages 1779-1794, 07.
  4. Bougheas, Spiros & Nieboer, Jeroen & Sefton, Martin, 2013. "Risk-taking in social settings: Group and peer effects," Journal of Economic Behavior & Organization, Elsevier, vol. 92(C), pages 273-283.
  5. Zizzo, Daniel John, 2013. "Claims and confounds in economic experiments," Journal of Economic Behavior & Organization, Elsevier, vol. 93(C), pages 186-195.
  6. Burks, Stephen V. & Krupka, Erin L., 2011. "A Multi-Method Approach to Identifying Norms and Normative Expectations within a Corporate Hierarchy: Evidence from the Financial Services Industry," IZA Discussion Papers 5818, Institute for the Study of Labor (IZA).
  7. Christian Thoeni & Simon Gaechter, 2011. "Peer Effects and Social Preferences in Voluntary Cooperation," Discussion Papers 2011-09, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  8. Tobias Regner & Gerhard Riener, 2011. "Motivational Cherry Picking," Jena Economic Research Papers 2011-029, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  9. Christian Thöni & Simon Gaechter, 2014. "Peer Effects and Social Preferences in Voluntary Cooperation," CESifo Working Paper Series 4741, CESifo Group Munich.
  10. Simon Gächter & Christian Thöni, 2014. "Peer effects and social preferences in voluntary cooperation," Discussion Papers 2014-03, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.

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