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Accounting for context: Separating monetary and social incentives

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  • Bergh, Andreas
  • Wichardt, Philipp

Abstract

This paper proposes a simple framework to model social preferences in a game theoretic framework which explicitly separates economic incentives from social (context) effects. It is argued that such a perspective makes it easier to analyse contextual effects. Moreover, the framework is used to exemplify both theoretically and empirically how contextual variables such as social norms can worsen a social dilemma or possibly make it disappear. The empirical results of a randomised controlled classroom experiment show that women are more responsive to such contextual effects and that social agreements can also worsen economic inefficiencies.

Suggested Citation

  • Bergh, Andreas & Wichardt, Philipp, 2014. "Accounting for context: Separating monetary and social incentives," Kiel Working Papers 1971, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:1971
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    References listed on IDEAS

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    More about this item

    Keywords

    Context Effects; Efficiency; Social Norms; Social Preferences; Utility;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • Z10 - Other Special Topics - - Cultural Economics - - - General

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