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Social Preferences: Some Simple Tests and a New Model

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  • Gary Charness

    (Universitat Pompeu Fabra -- Barcelona & University of California, Berkeley)

  • Matthew Rabin

    (University of California, Berkeley)

Abstract

Departures from pure self interest in economic experiments have recently inspired models of "social preferences". We conduct experiments on simple two-person and three-person games with binary choices that test these theories more directly than the array of games conventionally considered. Our experiments show strong support for the prevalence of "quasi-maximin" preferences: People sacrifice to increase the payoff for all recipients, but especially for the lowest-payoff recipients. People are also motivated by reciprocity: While people are reluctant to sacrifice to reciprocate good or bad behavior beyond what they would sacrifice for neutral parties, they withdraw willingness to sacrifice to achieve a fair outcome when others are themselves unwilling to sacrifice. Some participants are averse to getting different payoffs than others, but based on our experiments and reinterpretation of previous experiments we argue that behavior that has been presented as "difference aversion" in recent papers is actually a combination of reciprocal and quasi-maximin motivations. We formulate a model in which each player is willing to sacrifice to allocate the quasi-maximin allocation only to those players also believed to be pursuing the quasi- maximin allocation, and may sacrifice to punish unfair players.

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Bibliographic Info

Paper provided by EconWPA in its series General Economics and Teaching with number 0012002.

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Length: 69 pages
Date of creation: 02 Jan 2001
Date of revision:
Handle: RePEc:wpa:wuwpgt:0012002

Note: 69 pages Acrobat .pdf
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  1. Jordi Brandts & Gary Charness, 2000. "Hot vs. Cold: Sequential Responses and Preference Stability in Experimental Games," Experimental Economics, Springer, vol. 2(3), pages 227-238, March.
  2. Blount, Sally, 1995. "When Social Outcomes Aren't Fair: The Effect of Causal Attributions on Preferences," Organizational Behavior and Human Decision Processes, Elsevier, vol. 63(2), pages 131-144, August.
  3. Brandts, J. & Sola, C., 1998. "Reference Points and Negative Reciprocity in Simple Sequential Games," UFAE and IAE Working Papers 425.98, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  4. Andreoni, James & Brown, Paul M. & Vesterlund, Lise, 2002. "What Makes an Allocation Fair? Some Experimental Evidence," Games and Economic Behavior, Elsevier, vol. 40(1), pages 1-24, July.
  5. Armin Falk & Urs Fischbacher, . "A Theory of Reciprocity," IEW - Working Papers 006, Institute for Empirical Research in Economics - University of Zurich.
  6. Dufwenberg, M. & Kirchsteiger, G., 1998. "A Theory of Sequential Reciprocity," Discussion Paper 1998-37, Tilburg University, Center for Economic Research.
  7. Güth, Werner & Huck, Steffen & Müller, Wieland, 1998. "The relevance of equal splits: On a behavioral discontinuity in ultimatum games," SFB 373 Discussion Papers 1998,7, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
  8. Timothy N. Cason & Vai-Lam Mui, 1998. "Social Influence in the Sequential Dictator Game," Development Research Unit Working Paper Series archive-37, Monash University, Department of Economics.
  9. Charness, Gary B & Brandts, Jordi, 1998. "Hot vs. Cold: Sequential Responses and Preference Stability in Experimental Games," University of California at Santa Barbara, Economics Working Paper Series qt4kx7d5pv, Department of Economics, UC Santa Barbara.
  10. Gary E. Bolton & Axel Ockenfels, 1998. "Strategy and Equity: An ERC Analysis of the Guth-van Damme Game," Levine's Working Paper Archive 2060, David K. Levine.
  11. Jordi Brandts & Gary Charness, 1999. "Retribution in a cheap-talk experiment," Economics Working Papers 437, Department of Economics and Business, Universitat Pompeu Fabra.
  12. Robert Gibbons & Leaf Van Boven, 1999. "Contingent Social Utiltiy in the Prisoner's Dilemma," Levine's Working Paper Archive 2105, David K. Levine.
  13. Rabin, Matthew, 2000. "Bargaining Structure, Fairness and Efficiency," Department of Economics, Working Paper Series qt8723s6r2, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  14. Charness, Gary & Grosskopf, Brit, 2001. "Relative payoffs and happiness: an experimental study," Journal of Economic Behavior & Organization, Elsevier, vol. 45(3), pages 301-328, July.
  15. Gary Charness, 1996. "Attribution and reciprocity in a simulated labor market: An experimental investigation," Economics Working Papers 283, Department of Economics and Business, Universitat Pompeu Fabra, revised Oct 1997.
  16. Matthew Rabin., 1992. "Incorporating Fairness into Game Theory and Economics," Economics Working Papers 92-199, University of California at Berkeley.
  17. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March.
  18. James Andreoni, 2001. "Giving According to GARP," Theory workshop papers 339, UCLA Department of Economics.
  19. David K Levine, 1997. "Modeling Altruism and Spitefulness in Experiments," Levine's Working Paper Archive 2047, David K. Levine.
  20. Charness, Gary, 2000. "Responsibility and effort in an experimental labor market," Journal of Economic Behavior & Organization, Elsevier, vol. 42(3), pages 375-384, July.
  21. Theo Offerman, 1999. "Hurting hurts more than Helping helps: The Role of the Self-serving Bias," Tinbergen Institute Discussion Papers 99-018/1, Tinbergen Institute.
  22. Offerman, Theo & Sonnemans, Joep & Schram, Arthur, 1996. "Value Orientations, Expectations and Voluntary Contributions in Public Goods," Economic Journal, Royal Economic Society, vol. 106(437), pages 817-45, July.
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