Risk versus social preferences under the veil of ignorance
This paper reports experimental evidence from Dictator Game experiments in which subjects choose repeatedly one out of four options involving a pair of monetary prizes, one for them, one for another anonymously matched participant. In some sessions, there is no uncertainty about the player position (i.e., the identity of the best paid agent, constant across all options); in other sessions subjects choose “under the veil of ignorance”, not knowing in advance to which player position they will be eventually assigned, but only that either possibility is equally likely. Finally, we also collect evidence from additional sessions in which the same options correspond to binary lotteries, in which subjects may win the high or the low prize with equal probability, but their decisions do not affect other participants. We frame subjects’ decisions within the realm of a simple mean-variance utility maximization problem, in which the parameter associated to the variance is interpreted, depending on the treatment, as a measure of pure risk aversion, pure inequality aversion, or some combination of the two. Our estimates suggest that we can simply rely on risk aversion to explain subjects’ behavior under the veil of ignorance.
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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
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.:
- Carlsson, Fredrik & Daruvala, Dinky & Johansson-Stenman, Olof, 2001.
"Are People Inequality Averse Or Just Risk Averse?,"
Working Papers in Economics
43, University of Gothenburg, Department of Economics.
- Fredrik Carlsson & Dinky Daruvala & Olof Johansson-Stenman, 2005. "Are People Inequality-Averse, or Just Risk-Averse?," Economica, London School of Economics and Political Science, vol. 72(3), pages 375-396, 08.
- Antonio Cabrales & Raffaele Miniaci & Marco Piovesan & Giovanni Ponti, 2009.
"Social Preferences and Strategic Uncertainty: An Experiment on Markets and Contracts,"
- Antonio Cabrales & Raffaele Miniaci & Marco Piovesan & Giovanni Ponti, 2010. "Social Preferences and Strategic Uncertainty: An Experiment on Markets and Contracts," American Economic Review, American Economic Association, vol. 100(5), pages 2261-78, December.
- Antonio Cabrales & Raffaele Miniaci & Marco Piovesan & Giovanni Ponti, 2008. "Social Preferences and Strategic Uncertainty: An Experiment on Markets and Contracts," Discussion Papers 08-06, University of Copenhagen. Department of Economics.
- Steffen Andersen & Glenn W. Harrison & Morten I. Lau & E. Elisabet Rutström, 2008. "Eliciting Risk and Time Preferences," Econometrica, Econometric Society, vol. 76(3), pages 583-618, 05.
- Fehr, Ernst & Schmidt, Klaus M., .
"A theory of fairness, competition, and cooperation,"
Chapters in Economics,
University of Munich, Department of Economics.
- Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory of Fairness, Competition, and Cooperation," The Quarterly Journal of Economics, Oxford University Press, vol. 114(3), pages 817-868.
- Fehr, Ernst & Schmidt, Klaus M., 1999. "A theory of fairness, competition, and cooperation," Munich Reprints in Economics 20650, University of Munich, Department of Economics.
- Ernst Fehr & Klaus M. Schmidt, . "A Theory of Fairness, Competition and Cooperation," IEW - Working Papers 004, Institute for Empirical Research in Economics - University of Zurich.
- Fehr, Ernst & Schmidt, Klaus M., 1998. "A Theory of Fairness, Competition and Cooperation," CEPR Discussion Papers 1812, C.E.P.R. Discussion Papers.
- Glenn W. Harrison & Tanga McDaniel, 2008. "Voting games and computational complexity," Oxford Economic Papers, Oxford University Press, vol. 60(3), pages 546-565, July.
- Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
- Amiel, Yoram & Creedy, John & Hurn, Stan, 1999. " Measuring Attitudes towards Inequality," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(1), pages 83-96, March.
When requesting a correction, please mention this item's handle: RePEc:eee:ecolet:v:116:y:2012:i:2:p:143-146. 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: (Zhang, Lei)
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.