Advanced Search
MyIDEAS: Login to save this paper or follow this series

Reference Dependent Altruism

Contents:

Author Info

  • Breitmoser, Yves
  • Tan, Jonathan H.W.

Abstract

In view of behavioral patterns left unorganized by current social preference theories, we propose a theory of reference dependent altruism (RDA). With RDA, one's degree of altruism increases at reference points. It induces equity and efficiency effects that are conditional on whether or not payoffs meet reference points. We verify the theory first by experimentally analyzing majority bargaining, where observed behavior contradicts existing theories but confirms RDA. Using parameter estimates from majority bargaining, we then make out-of-sample predictions for Charness-Rabin, Engelmann-Strobel, and Bolton-Ockenfels games. RDA organizes these seemingly disparate games out-of-sample, which validates our hypothesis that pro-social behavior primarily relates to reference points.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://mpra.ub.uni-muenchen.de/52774/
File Function: original version
Download Restriction: no

Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 52774.

as in new window
Length:
Date of creation: 07 Jan 2014
Date of revision:
Handle: RePEc:pra:mprapa:52774

Contact details of provider:
Postal: Schackstr. 4, D-80539 Munich, Germany
Phone: +49-(0)89-2180-2219
Fax: +49-(0)89-2180-3900
Web page: http://mpra.ub.uni-muenchen.de
More information through EDIRC

Related research

Keywords: bargaining; non-cooperative game; laboratory experiment; social preferences; quantal response equilibrium;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
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.:
as in new window
  1. Todd L. Cherry & Peter Frykblom & Jason F. Shogren, 2002. "Hardnose the Dictator," American Economic Review, American Economic Association, American Economic Association, vol. 92(4), pages 1218-1221, September.
  2. James Andreoni & Charles Sprenger, 2010. "Estimating Time Preferences from Convex Budgets," NBER Working Papers 16347, National Bureau of Economic Research, Inc.
  3. Gary Charness & Matthew Rabin, 2003. "Understanding Social Preferences with Simple Tests," General Economics and Teaching, EconWPA 0303002, EconWPA.
  4. Koszegi, Botond & Rabin, Matthew, 2004. "A Model of Reference-Dependent Preferences," Department of Economics, Working Paper Series, Department of Economics, Institute for Business and Economic Research, UC Berkeley qt0w82b6nm, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  5. Gneiting, Tilmann & Raftery, Adrian E., 2007. "Strictly Proper Scoring Rules, Prediction, and Estimation," Journal of the American Statistical Association, American Statistical Association, American Statistical Association, vol. 102, pages 359-378, March.
  6. Montero, Maria, 2006. "Noncooperative foundations of the nucleolus in majority games," Games and Economic Behavior, Elsevier, Elsevier, vol. 54(2), pages 380-397, February.
  7. Vuong, Quang H, 1989. "Likelihood Ratio Tests for Model Selection and Non-nested Hypotheses," Econometrica, Econometric Society, Econometric Society, vol. 57(2), pages 307-33, March.
  8. James M. Snyder Jr. & Michael M. Ting & Stephen Ansolabehere, 2005. "Legislative Bargaining under Weighted Voting," American Economic Review, American Economic Association, American Economic Association, vol. 95(4), pages 981-1004, September.
  9. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, Econometric Society, vol. 47(2), pages 263-91, March.
  10. Blanco, Mariana & Engelmann, Dirk & Normann, Hans Theo, 2011. "A within-subject analysis of other-regarding preferences," Games and Economic Behavior, Elsevier, Elsevier, vol. 72(2), pages 321-338, June.
  11. Eraslan, Hulya, 2002. "Uniqueness of Stationary Equilibrium Payoffs in the Baron-Ferejohn Model," Journal of Economic Theory, Elsevier, Elsevier, vol. 103(1), pages 11-30, March.
  12. Jackson, Matthew O. & Moselle, Boaz, 2002. "Coalition and Party Formation in a Legislative Voting Game," Journal of Economic Theory, Elsevier, Elsevier, vol. 103(1), pages 49-87, March.
  13. Cox, James C. & Friedman, Daniel & Gjerstad, Steven, 2007. "A tractable model of reciprocity and fairness," Games and Economic Behavior, Elsevier, Elsevier, vol. 59(1), pages 17-45, April.
  14. Goeree, Jacob K. & Holt, Charles A. & Laury, Susan K., 2002. "Private costs and public benefits: unraveling the effects of altruism and noisy behavior," Journal of Public Economics, Elsevier, Elsevier, vol. 83(2), pages 255-276, February.
  15. Cho, Seok-ju & Duggan, John, 2003. "Uniqueness of stationary equilibria in a one-dimensional model of bargaining," Journal of Economic Theory, Elsevier, Elsevier, vol. 113(1), pages 118-130, November.
  16. Cardona, Daniel & Ponsati, Clara, 2007. "Bargaining one-dimensional social choices," Journal of Economic Theory, Elsevier, Elsevier, vol. 137(1), pages 627-651, November.
  17. Arcidiacono, Peter & Jones, John B., 2000. "Finite Mixture Distribution, Sequential Likelihood, and the EM Algorithm," Working Papers, Duke University, Department of Economics 00-16, Duke University, Department of Economics.
  18. Engelmann,Dirk & Strobel,Martin, 2002. "Inequality Aversion, Efficiency, and Maximin Preferences in Simple Distribution Experiments," Research Memorandum, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT) 015, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
  19. James Andreoni & B. Douglas Bernheim, 2007. "Social Image and the 50-50 Norm: A Theoretical and Experimental Analysis of Audience Effects," Discussion Papers, Stanford Institute for Economic Policy Research 07-030, Stanford Institute for Economic Policy Research.
  20. repec:kap:expeco:v:1:y:1998:i:1:p:43-62 is not listed on IDEAS
  21. Rabin, Matthew, 1993. "Incorporating Fairness into Game Theory and Economics," American Economic Review, American Economic Association, American Economic Association, vol. 83(5), pages 1281-1302, December.
  22. Brian Knight, 2005. "Estimating the Value of Proposal Power," American Economic Review, American Economic Association, American Economic Association, vol. 95(5), pages 1639-1652, December.
  23. Michalis Drouvelis & Maria Montero & Martin Sefton, . "Gaining Power through Enlargement: Strategic Foundations and Experimental Evidence," Discussion Papers, Department of Economics, University of York 09/30, Department of Economics, University of York.
  24. Stahl Dale O. & Wilson Paul W., 1995. "On Players' Models of Other Players: Theory and Experimental Evidence," Games and Economic Behavior, Elsevier, Elsevier, vol. 10(1), pages 218-254, July.
  25. Selten, Reinhard, 1996. "Axiomatic Characterization of the Quadratic Scoring Rule," Discussion Paper Serie B, University of Bonn, Germany 390, University of Bonn, Germany.
  26. Alexander W. Cappelen & Astri Drange Hole & Erik Ø Sørensen & Bertil Tungodden, 2007. "The Pluralism of Fairness Ideals: An Experimental Approach," American Economic Review, American Economic Association, American Economic Association, vol. 97(3), pages 818-827, June.
  27. Colin F. Camerer & Richard H. Thaler, 1995. "Anomalies: Ultimatums, Dictators and Manners," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 9(2), pages 209-219, Spring.
  28. Fehr, Ernst & Schmidt, Klaus M., 2009. "On Inequity Aversion - A Reply to Binmore and Shaked," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University 256, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  29. Guillaume Fréchette & John Kagel & Massimo Morelli, 2012. "Pork versus public goods: an experimental study of public good provision within a legislative bargaining framework," Economic Theory, Springer, Springer, vol. 49(3), pages 779-800, April.
  30. Botond Koszegi & Matthew Rabin, 2006. "Reference-Dependent Risk Attitudes," Levine's Bibliography 122247000000001267, UCLA Department of Economics.
  31. Murnighan, J Keith & Roth, Alvin E & Schoumaker, Francoise, 1988. " Risk Aversion in Bargaining: An Experimental Study," Journal of Risk and Uncertainty, Springer, Springer, vol. 1(1), pages 101-24, March.
  32. Guillaume Fréchette & John H. Kagel & Massimo Morelli, 2005. "Behavioral Identification in Coalitional Bargaining: An Experimental Analysis of Demand Bargaining and Alternating Offers," Econometrica, Econometric Society, Econometric Society, vol. 73(6), pages 1893-1937, November.
  33. Maria Montero, 2006. "Inequity Aversion May Increase Inequity," Working Papers, Fondazione Eni Enrico Mattei 2006.80, Fondazione Eni Enrico Mattei.
  34. Breitmoser, Yves & Tan, Jonathan H.W., 2013. "Reference dependent altruism in demand bargaining," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 92(C), pages 127-140.
  35. Yves Breitmoser & Jonathan H. W. Tan & Daniel John Zizzo, 2008. "Understanding Perpetual R&D Races," Working Papers, Centre for Competition Policy, University of East Anglia 08-22, Centre for Competition Policy, University of East Anglia.
  36. Jonathan Shalev, 1996. "Loss Aversion and Bargaining," Game Theory and Information, EconWPA 9606001, EconWPA, revised 18 Mar 1997.
  37. Fehr, Ernst & Schmidt, Klaus M., 1998. "A Theory of Fairness, Competition and Cooperation," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1812, C.E.P.R. Discussion Papers.
  38. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, Springer, vol. 10(2), pages 171-178, June.
  39. James Andreoni & John Miller, 2002. "Giving According to GARP: An Experimental Test of the Consistency of Preferences for Altruism," Econometrica, Econometric Society, Econometric Society, vol. 70(2), pages 737-753, March.
  40. Daniel Diermeier & Hulya Eraslan & Antonio Merlo, 2003. "A Structural Model of Government Formation," Econometrica, Econometric Society, Econometric Society, vol. 71(1), pages 27-70, January.
  41. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, American Economic Association, vol. 90(1), pages 166-193, March.
  42. David Cooper & E. Dutcher, 2011. "The dynamics of responder behavior in ultimatum games: a meta-study," Experimental Economics, Springer, Springer, vol. 14(4), pages 519-546, November.
  43. Richard Mckelvey & Thomas Palfrey, 1998. "Quantal Response Equilibria for Extensive Form Games," Experimental Economics, Springer, Springer, vol. 1(1), pages 9-41, June.
  44. Yildirim, Huseyin, 2007. "Proposal power and majority rule in multilateral bargaining with costly recognition," Journal of Economic Theory, Elsevier, Elsevier, vol. 136(1), pages 167-196, September.
  45. Enrico Diecidue & Jeroen van de Ven, 2008. "Aspiration Level, Probability Of Success And Failure, And Expected Utility," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(2), pages 683-700, 05.
  46. Baron David & Kalai Ehud, 1993. "The Simplest Equilibrium of a Majority-Rule Division Game," Journal of Economic Theory, Elsevier, Elsevier, vol. 61(2), pages 290-301, December.
  47. James Andreoni & Charles Sprenger, 2010. "Risk Preferences Are Not Time Preferences," Levine's Working Paper Archive 814577000000000452, David K. Levine.
  48. Frechette, Guillaume & Kagel, John H. & Morelli, Massimo, 2005. "Nominal bargaining power, selection protocol, and discounting in legislative bargaining," Journal of Public Economics, Elsevier, Elsevier, vol. 89(8), pages 1497-1517, August.
  49. Okada, Akira, 2011. "Coalitional bargaining games with random proposers: Theory and application," Games and Economic Behavior, Elsevier, Elsevier, vol. 73(1), pages 227-235, September.
  50. Kritikos, Alexander & Bolle, Friedel, 2001. "Distributional concerns: equity- or efficiency-oriented?," Economics Letters, Elsevier, Elsevier, vol. 73(3), pages 333-338, December.
  51. Diermeier, Daniel & Eraslan, Hulya & Merlo, Antonio, 2002. "Coalition governments and comparative constitutional design," European Economic Review, Elsevier, Elsevier, vol. 46(4-5), pages 893-907, May.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:52774. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.