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Heterogeneous social preferences

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  • 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
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    Cited by:

    1. repec:bla:germec:v:18:y:2017:i:4:p:411-443 is not listed on IDEAS
    2. 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.
    3. 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.
    4. Adrian Bruhin & Ernst Fehr & Daniel Schunk, 2016. "The Many Faces of Human Sociality: Uncovering the Distribution and Stability of Social Preferences," Working Papers 1603, Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz, revised 01 Feb 2016.
    5. Chang, Jae Bong & Lusk, Jayson L., 2009. "Fairness and food choice," Food Policy, Elsevier, vol. 34(6), pages 483-491, December.
    6. Ispano, Alessandro, 2015. "A note on the equilibria of the unbounded traveler’s dilemma," Mathematical Social Sciences, Elsevier, vol. 77(C), pages 52-54.
    7. 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.
    8. 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.
    9. 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.
    10. Fadong Chen & Urs Fischbacher, 2015. "Cognitive Processes of Distributional Preferences: A Response Time Study," TWI Research Paper Series 101, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
    11. Boschini, Anne & Muren, Astri & Persson, Mats, 2013. "The Social Egoist," Research Papers in Economics 2013:14, Stockholm University, Department of Economics.
    12. 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.
    13. 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.
    14. repec:taf:apeclt:v:24:y:2017:i:10:p:722-726 is not listed on IDEAS
    15. 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.
    16. 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.
    17. 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.
    18. repec:eee:soceco:v:68:y:2017:i:c:p:130-139 is not listed on IDEAS
    19. 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.

    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

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