IDEAS home Printed from https://ideas.repec.org/a/eee/jeborg/v65y2008i3-4p436-457.html
   My bibliography  Save this article

Heterogeneous social preferences

Author

Listed:
  • Erlei, Mathias

Abstract

Recent research has shown the usefulness of social preferences in explaining behavior in laboratory experiments. This paper demonstrates that models of social preferences are particularly powerful in explaining behavior if they are embedded in a setting of heterogeneous actors with heterogeneous (social) preferences. For this purpose a simple model is introduced that combines the basic ideas of inequity aversion, social welfare preferences, reciprocity and heterogeneity. This model is applied to 43 games, and its predictive accuracy is clearly higher than that of the isolated approaches. Furthermore, it can explain most of the "anomalies" discussed in Goeree and Holt [Goeree, J., Holt, Ch.A., 2001. Ten little treasures of game theory and ten intuitive contradictions, American Economic Review 91, 1402-1422].

Suggested Citation

  • Erlei, Mathias, 2008. "Heterogeneous social preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 65(3-4), pages 436-457, March.
  • Handle: RePEc:eee:jeborg:v:65:y:2008:i:3-4:p:436-457
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0167-2681(06)00206-X
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Dirk Engelmann & Martin Strobel, 2004. "Inequality Aversion, Efficiency, and Maximin Preferences in Simple Distribution Experiments," American Economic Review, American Economic Association, vol. 94(4), pages 857-869, September.
    2. Gary Charness & Matthew Rabin, 2002. "Understanding Social Preferences with Simple Tests," The Quarterly Journal of Economics, Oxford University Press, vol. 117(3), pages 817-869.
    3. Jacob K. Goeree & Charles A. Holt, 2001. "Ten Little Treasures of Game Theory and Ten Intuitive Contradictions," American Economic Review, American Economic Association, vol. 91(5), pages 1402-1422, December.
    4. 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.
    5. Fudenberg, Drew & Levine, David, 1998. "Learning in games," European Economic Review, Elsevier, vol. 42(3-5), pages 631-639, May.
    6. Ernst Fehr & Susanne Kremhelmer & Klaus M. Schmidt, 2008. "Fairness and the Optimal Allocation of Ownership Rights," Economic Journal, Royal Economic Society, vol. 118(531), pages 1262-1284, August.
    7. Fehr, Ernst & Schmidt, Klaus M., 2000. "Fairness, incentives, and contractual choices," European Economic Review, Elsevier, vol. 44(4-6), pages 1057-1068, May.
    8. Simon P. Anderson & Jacob K. Goeree & Charles A. Holt, 2002. "The Logit Equilibrium: A Perspective on Intuitive Behavioral Anomalies," Southern Economic Journal, Southern Economic Association, vol. 69(1), pages 21-47, July.
    9. Dufwenberg, Martin & Kirchsteiger, Georg, 2004. "A theory of sequential reciprocity," Games and Economic Behavior, Elsevier, vol. 47(2), pages 268-298, May.
    10. Gary E Bolton & Axel Ockenfels, 1997. "A Theory of Equity, Reciprocity, and Competition," Levine's Working Paper Archive 1889, David K. Levine.
    11. Jorgen W. Weibull, 1997. "Evolutionary Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262731215, January.
    12. Richard Mckelvey & Thomas Palfrey, 1998. "Quantal Response Equilibria for Extensive Form Games," Experimental Economics, Springer;Economic Science Association, vol. 1(1), pages 9-41, June.
    13. John Kagel & Katherine Wolfe, 2001. "Tests of Fairness Models Based on Equity Considerations in a Three-Person Ultimatum Game," Experimental Economics, Springer;Economic Science Association, vol. 4(3), pages 203-219, December.
    14. 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.
    15. Rabin, Matthew, 1993. "Incorporating Fairness into Game Theory and Economics," American Economic Review, American Economic Association, vol. 83(5), pages 1281-1302, December.
    16. Drew Fudenberg & David K. Levine, 1998. "The Theory of Learning in Games," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061945, January.
    17. James Andreoni & John Miller, 2002. "Giving According to GARP: An Experimental Test of the Consistency of Preferences for Altruism," Econometrica, Econometric Society, vol. 70(2), pages 737-753, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chang, Jae Bong & Lusk, Jayson L., 2009. "Fairness and food choice," Food Policy, Elsevier, vol. 34(6), pages 483-491, December.
    2. Kamas, Linda & Preston, Anne, 2012. "Distributive and reciprocal fairness: What can we learn from the heterogeneity of social preferences?," Journal of Economic Psychology, Elsevier, vol. 33(3), pages 538-553.
    3. Fadong Chen & Urs Fischbacher, 2015. "Cognitive Processes of Distributional Preferences: A Response Time Study," TWI Research Paper Series 101, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
    4. Marie-Laure Cabon-Dhersin & Nathalie Etchart-Vincent, 2011. "Cooperation: the power of a single word? Some experimental evidence on wording and gender effects in a Game of Chicken," Working Papers hal-00741973, HAL.
    5. Adrian Bruhin & Ernst Fehr & Daniel Schunk, 2016. "The Many Faces of Human Sociality:Uncovering the Distribution and Stability of Social Preferences," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 16.01, Université de Lausanne, Faculté des HEC, DEEP.
    6. Marcelo Tyszler & Arthur Schram, 2013. "Strategic Voting in Heterogeneous Electorates: An Experimental Study," Games, MDPI, Open Access Journal, vol. 4(4), pages 1-24, November.
    7. Linda Kamas & Anne Preston, 2012. "Gender and Social Preferences in the US: An Experimental Study," Feminist Economics, Taylor & Francis Journals, vol. 18(1), pages 135-160, January.
    8. repec:bla:germec:v:18:y:2017:i:4:p:411-443 is not listed on IDEAS
    9. Hayat Khan, 2009. "Modeling Social Preferences: A Generalized Model of Inequity Aversion," EERI Research Paper Series EERI_RP_2009_21, Economics and Econometrics Research Institute (EERI), Brussels.
    10. Tilman Becker & Michael Carter & Jörg Naeve, 2005. "Experts Playing the Traveler's Dilemma," Diskussionspapiere aus dem Institut für Volkswirtschaftslehre der Universität Hohenheim 252/2005, Department of Economics, University of Hohenheim, Germany.
    11. Marie-Laure Cabon-Dhersin & Nathalie Etchart-Vincent, 2012. "The puzzle of cooperation in a game of chicken: an experimental study," Theory and Decision, Springer, vol. 72(1), pages 65-87, January.
    12. Zarri, Luca, 2008. "Endogenous Social Preferences, Heterogeneity and Cooperation," AICCON Working Papers 51-2008, Associazione Italiana per la Cultura della Cooperazione e del Non Profit.
    13. Fehr, Ernst & Schmidt, Klaus M., 2005. "The Economics of Fairness, Reciprocity and Altruism – Experimental Evidence and New Theories," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 66, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    14. Leonardo Becchetti & Vittorio Pelligra & Francesco Salustri, 2017. "Testing for heterogeneity of preferences in randomized experiments: a satisfaction-based approach applied to multiplayer prisoners’ dilemmas," Applied Economics Letters, Taylor & Francis Journals, vol. 24(10), pages 722-726, June.
    15. repec:eee:soceco:v:68:y:2017:i:c:p:130-139 is not listed on IDEAS
    16. Boschini, Anne & Muren, Astri & Persson, Mats, 2013. "The Social Egoist," Research Papers in Economics 2013:14, Stockholm University, Department of Economics.
    17. Ispano, Alessandro, 2015. "A note on the equilibria of the unbounded traveler’s dilemma," Mathematical Social Sciences, Elsevier, vol. 77(C), pages 52-54.
    18. Mathias Erlei & Heike Schenk-Mathes, 2017. "Bounded Rationality in Principal-Agent Relationships," German Economic Review, Verein für Socialpolitik, vol. 18(4), pages 411-443, November.
    19. Bolle, Friedel & Liepmann, Hannah & Vogel, Claudia, 2012. "How much social insurance do you want? An experimental study," Journal of Economic Psychology, Elsevier, vol. 33(6), pages 1170-1181.

    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jeborg:v:65:y:2008:i:3-4:p:436-457. 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: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/jebo .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.