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Peer Effects in Pro-Social Behaviour: Social Norms or Social Preferences?

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  • Simon Gachter

    ()
    (School of Economics, University of Nottingham)

  • Daniele Nosenzo

    ()
    (School of Economics, University of Nottingham)

  • Martin Sefton

    ()
    (School of Economics, University of Nottingham)

Abstract

We compare social preference and social norm based explanations for peer effects in a three-person gift-exchange game experiment. In the experiment a principal pays a wage to each of two agents, who then make effort choices sequentially. 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 predicted by a model of distributional social preferences (Fehr-Schmidt, 1999). As we show from a norms-elicitation experiment, it is also consistent with social norms compliance. A conditional logit investigation of the explanatory power of payoff inequality and elicited norms finds that the second agent's effort can be best explained by the social preferences model. In further treatments with modified games we find that the presence/strength of peer effects changes as predicted by the social preferences model. As with the baseline treatment, a conditional logit analysis favors an explanation based on social preferences, rather than social norms following for these treatments. Our results suggest that, in our context, the social preferences model provides a parsimonious explanation for the observed peer effect.

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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 2012-01.

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Date of creation: Jan 2012
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Handle: RePEc:not:notcdx:2012-01

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Keywords: peer effects; social influence; gift-exchange; experiment; social preferences; inequity aversion; measuring social norms.;

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Citations

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Cited by:
  1. 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.
  2. Regner, Tobias & Riener, Gerhard, 2012. "Motivational cherry picking," DICE Discussion Papers 68, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
  3. Montizaan Raymond & Cörvers Frank & Grip Andries de & Dohmen Thomas, 2012. "Negative Reciprocity and retrenched pension rights," Research Memorandum 053, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  4. Spiros Bougheas & Jeroen Nieboer & Martin Sefton, 2013. "Risk Taking in Social Settings: Group and Peer Effects," Discussion Papers 2013-01, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  5. Lahno, Amrei M. & Serra-Garcia, Marta, 2012. "Peer Effects in Risk Taking," Discussion Papers in Economics 14309, University of Munich, Department of Economics.
  6. 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.
  7. Stephen V. Burks & Erin L. Krupka, 2012. "A Multimethod Approach to Identifying Norms and Normative Expectations Within a Corporate Hierarchy: Evidence from the Financial Services Industry," Management Science, INFORMS, vol. 58(1), pages 203-217, January.
  8. Christian Thöni & Simon Gaechter, 2014. "Peer Effects and Social Preferences in Voluntary Cooperation," CESifo Working Paper Series 4741, CESifo Group Munich.
  9. Daniele Nosenzo, 2012. "Pay Secrecy and effort provision," Discussion Papers 2012-13, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  10. Zizzo, Daniel John, 2013. "Claims and confounds in economic experiments," Journal of Economic Behavior & Organization, Elsevier, vol. 93(C), pages 186-195.

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