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Abstract

Some current utility models presume that people are concerned with their relative standing in a reference group. If this is true, do certain types care more about this than others? Using simple binary decisions and self-reported happiness, we investigate both the prevalence of ``difference aversion'' and whether happiness levels influence the taste for social comparisons. Our decision tasks distinguish between a person’s desire to achieving the social optimum, equality or advantageous relative standing. Most people appear to disregard relative payoffs, instead typically making choices resulting in higher social payoffs. While we do not find a strong general correlation between happiness and concern for relative payoffs, we do observe that a willingness to lower another person’s payoff below one’s own (competitive preferences) seems correlated with unhappiness.

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Bibliographic Info

Paper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 436.

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Date of creation: Aug 1999
Date of revision: Jan 2000
Handle: RePEc:upf:upfgen:436

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Web page: http://www.econ.upf.edu/

Related research

Keywords: Happiness; relative payoffs; social preferences; subjective well-being; Leex;

Other versions of this item:

Find related papers by JEL classification:

• A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
• A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
• B49 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Other
• C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
• D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

This paper has been announced in the following NEP Reports:

• NEP-ALL-2000-03-06 (All new papers)
• NEP-EXP-2000-03-06 (Experimental Economics)

References

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1. Akerlof, George A, 1982. "Labor Contracts as Partial Gift Exchange," The Quarterly Journal of Economics, MIT Press, vol. 97(4), pages 543-69, November.
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   • Gary Charness and Matthew Rabin., 2000. "Social Preferences: Some Simple Tests and a New Model," Economics Working Papers E00-283, University of California at Berkeley.
   • Gary Charness & Matthew Rabin, 1999. "Social preferences: Some simple tests and a new model," Economics Working Papers 441, Department of Economics and Business, Universitat Pompeu Fabra, revised Jan 2000.
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11. repec:wop:humbsf:1999-66 is not listed on IDEAS
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