IDEAS home Printed from https://ideas.repec.org/a/sae/ratsoc/v27y2015i4p469-491.html
   My bibliography  Save this article

Are dictators loss averse?

Author

Listed:
  • Trond U Halvorsen

Abstract

This paper investigates whether individuals are loss averse with respect to their status quo wealth level in sharing situations. In a real-effort dictator game, dictators are asked to share their earnings either before or after earning them. The instructions also variably emphasize the amount that the dictator will give or receive at the end of the experiment. This study finds that whether the money is already earned or not has no statistically significant effects on the average sharing behavior, regardless of which instructions are used. The results indicate that dictator game participants are not loss averse with respect to their status quo wealth level.

Suggested Citation

  • Trond U Halvorsen, 2015. "Are dictators loss averse?," Rationality and Society, , vol. 27(4), pages 469-491, November.
  • Handle: RePEc:sae:ratsoc:v:27:y:2015:i:4:p:469-491
    DOI: 10.1177/1043463115605302
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/1043463115605302
    Download Restriction: no

    File URL: https://libkey.io/10.1177/1043463115605302?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Hoffman Elizabeth & McCabe Kevin & Shachat Keith & Smith Vernon, 1994. "Preferences, Property Rights, and Anonymity in Bargaining Games," Games and Economic Behavior, Elsevier, vol. 7(3), pages 346-380, November.
    2. Cappelen, Alexander W. & Nielsen, Ulrik H. & Sørensen, Erik Ø. & Tungodden, Bertil & Tyran, Jean-Robert, 2013. "Give and take in dictator games," Economics Letters, Elsevier, vol. 118(2), pages 280-283.
    3. Christoph Engel, 2011. "Dictator games: a meta study," Experimental Economics, Springer;Economic Science Association, vol. 14(4), pages 583-610, November.
    4. John A. List, 2007. "On the Interpretation of Giving in Dictator Games," Journal of Political Economy, University of Chicago Press, vol. 115, pages 482-493.
    5. Cappelen, Alexander W. & Sørensen, Erik Ø. & Tungodden, Bertil, 2010. "Responsibility for what? Fairness and individual responsibility," European Economic Review, Elsevier, vol. 54(3), pages 429-441, April.
    6. Kurtis Swope & John Cadigan & Pamela Schmitt & Robert Shupp, 2008. "Social Position and Distributive Justice: Experimental Evidence," Southern Economic Journal, John Wiley & Sons, vol. 74(3), pages 811-818, January.
    7. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-291, March.
    8. Alexander W. Cappelen & Astri Drange Hole & Erik Ø Sørensen & Bertil Tungodden, 2007. "The Pluralism of Fairness Ideals: An Experimental Approach," American Economic Review, American Economic Association, vol. 97(3), pages 818-827, June.
    9. Todd L. Cherry & Peter Frykblom & Jason F. Shogren, 2002. "Hardnose the Dictator," American Economic Review, American Economic Association, vol. 92(4), pages 1218-1221, September.
    10. Tversky, Amos & Kahneman, Daniel, 1992. "Advances in Prospect Theory: Cumulative Representation of Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 297-323, October.
    11. Anna Dreber & Tore Ellingsen & Magnus Johannesson & David Rand, 2013. "Do people care about social context? Framing effects in dictator games," Experimental Economics, Springer;Economic Science Association, vol. 16(3), pages 349-371, September.
    12. Botond Koszegi & Matthew Rabin, 2007. "Reference-Dependent Risk Attitudes," American Economic Review, American Economic Association, vol. 97(4), pages 1047-1073, September.
    13. Colin F. Camerer & Ernst Fehr, "undated". "Measuring Social Norms and Preferences using Experimental Games: A Guide for Social Scientists," IEW - Working Papers 097, Institute for Empirical Research in Economics - University of Zurich.
    14. Amos Tversky & Daniel Kahneman, 1991. "Loss Aversion in Riskless Choice: A Reference-Dependent Model," The Quarterly Journal of Economics, Oxford University Press, vol. 106(4), pages 1039-1061.
    15. Horowitz, John K. & McConnell, Kenneth E., 2002. "A Review of WTA/WTP Studies," Journal of Environmental Economics and Management, Elsevier, vol. 44(3), pages 426-447, November.
    16. Nagore Iriberri & Pedro Rey-Biel, 2011. "The role of role uncertainty in modified dictator games," Experimental Economics, Springer;Economic Science Association, vol. 14(2), pages 160-180, May.
    17. Eckel, Catherine C. & Grossman, Philip J., 2008. "Differences in the Economic Decisions of Men and Women: Experimental Evidence," Handbook of Experimental Economics Results, in: Charles R. Plott & Vernon L. Smith (ed.), Handbook of Experimental Economics Results, edition 1, volume 1, chapter 57, pages 509-519, Elsevier.
    18. David Gill & Victoria Prowse, 2012. "A Structural Analysis of Disappointment Aversion in a Real Effort Competition," American Economic Review, American Economic Association, vol. 102(1), pages 469-503, February.
    19. Harry Markowitz, 1952. "The Utility of Wealth," Journal of Political Economy, University of Chicago Press, vol. 60, pages 151-151.
    20. Bateman, Ian & Kahneman, Daniel & Munro, Alistair & Starmer, Chris & Sugden, Robert, 2005. "Testing competing models of loss aversion: an adversarial collaboration," Journal of Public Economics, Elsevier, vol. 89(8), pages 1561-1580, August.
    21. Jason Dana & Roberto Weber & Jason Kuang, 2007. "Exploiting moral wiggle room: experiments demonstrating an illusory preference for fairness," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 33(1), pages 67-80, October.
    22. Sugden, Robert, 2003. "Reference-dependent subjective expected utility," Journal of Economic Theory, Elsevier, vol. 111(2), pages 172-191, August.
    23. Michael Visser & Matthew Roelofs, 2011. "Heterogeneous preferences for altruism: gender and personality, social status, giving and taking," Experimental Economics, Springer;Economic Science Association, vol. 14(4), pages 490-506, November.
    24. Forsythe Robert & Horowitz Joel L. & Savin N. E. & Sefton Martin, 1994. "Fairness in Simple Bargaining Experiments," Games and Economic Behavior, Elsevier, vol. 6(3), pages 347-369, May.
    25. Arkes, Hal R. & Joyner, Cynthia A. & Pezzo, Mark V. & Nash, Jane Gradwohl & Siegel-Jacobs, Karen & Stone, Eric, 1994. "The Psychology of Windfall Gains," Organizational Behavior and Human Decision Processes, Elsevier, vol. 59(3), pages 331-347, September.
    26. Frohlich, Norman & Oppenheimer, Joe & Bernard Moore, J., 2001. "Some doubts about measuring self-interest using dictator experiments: the costs of anonymity," Journal of Economic Behavior & Organization, Elsevier, vol. 46(3), pages 271-290, November.
    27. Tversky, Amos & Kahneman, Daniel, 1986. "Rational Choice and the Framing of Decisions," The Journal of Business, University of Chicago Press, vol. 59(4), pages 251-278, October.
    28. Rachel Croson & Uri Gneezy, 2009. "Gender Differences in Preferences," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 448-474, June.
    29. James Konow, 2000. "Fair Shares: Accountability and Cognitive Dissonance in Allocation Decisions," American Economic Review, American Economic Association, vol. 90(4), pages 1072-1091, September.
    30. Small, Deborah A., 2010. "Reference-dependent sympathy," Organizational Behavior and Human Decision Processes, Elsevier, vol. 112(2), pages 151-160, July.
    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, Daphne & Chen, Roy & Krupka, Erin, 2019. "Rhetoric matters: A social norms explanation for the anomaly of framing," Games and Economic Behavior, Elsevier, vol. 116(C), pages 158-178.
    2. repec:cup:judgdm:v:14:y:2019:i:3:p:309-317 is not listed on IDEAS
    3. Valerio Capraro & Andrea Vanzo, 2019. "The power of moral words: Loaded language generates framing effects in the extreme dictator game," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 14(3), pages 309-317, May.
    4. Valerio Capraro & Andrea Vanzo & Antonio Cabrales, 2022. "Playing with words: Do people exploit loaded language to affect others’ decisions for their own benefit?," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 17(1), pages 50-69, January.
    5. repec:cup:judgdm:v:17:y:2022:i:1:p:50-69 is not listed on IDEAS

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Breitmoser, Yves & Vorjohann, Pauline, 2018. "Welfare-Based Altruism," Rationality and Competition Discussion Paper Series 89, CRC TRR 190 Rationality and Competition.
    2. Breitmoser, Yves & Vorjohann, Pauline, 2022. "Fairness-based Altruism," Center for Mathematical Economics Working Papers 666, Center for Mathematical Economics, Bielefeld University.
    3. Emin Karagözoğlu & Elif Tosun, 2022. "Endogenous Game Choice and Giving Behavior in Distribution Games," Games, MDPI, vol. 13(6), pages 1-32, November.
    4. Elena Cettolin & Arno Riedl & Giang Tran, 2017. "Giving in the face of risk," Journal of Risk and Uncertainty, Springer, vol. 55(2), pages 95-118, December.
    5. Thunström, Linda, 2019. "Preferences for fairness over losses," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 83(C).
    6. Faillo, Marco & Rizzolli, Matteo & Tontrup, Stephan, 2019. "Thou shalt not steal: Taking aversion with legal property claims," Journal of Economic Psychology, Elsevier, vol. 71(C), pages 88-101.
    7. Franzen, Axel & Pointner, Sonja, 2012. "Anonymity in the dictator game revisited," Journal of Economic Behavior & Organization, Elsevier, vol. 81(1), pages 74-81.
    8. Kassas, Bachir & Palma, Marco A., 2019. "Self-serving biases in social norm compliance," Journal of Economic Behavior & Organization, Elsevier, vol. 159(C), pages 388-408.
    9. Eriksen, Kristoffer W. & Fest, Sebastian & Kvaløy, Ola & Dijk, Oege, 2022. "Fair advice," Journal of Banking & Finance, Elsevier, vol. 143(C).
    10. Grundmann, Susanna, 2020. "Do just deserts and competition shape patterns of cheating?," Passauer Diskussionspapiere, Volkswirtschaftliche Reihe V-79-20, University of Passau, Faculty of Business and Economics.
    11. Vanessa Valero, 2022. "Redistribution and beliefs about the source of income inequality," Experimental Economics, Springer;Economic Science Association, vol. 25(3), pages 876-901, June.
    12. Marco Faillo & Matteo Rizzolli & Stephan Tontrup, 2016. "Thou shalt not steal (from hard-working people)An experiment on respect for property claims," Econometica Working Papers wp58, Econometica.
    13. Ogawa, Kazuhito & Takemoto, Toru & Takahashi, Hiromasa & Suzuki, Akihiro, 2012. "Income earning opportunity and work performance affect donating behavior: Evidence from dictator game experiments," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(6), pages 816-826.
    14. Aurélien Baillon & Han Bleichrodt & Vitalie Spinu, 2020. "Searching for the Reference Point," Management Science, INFORMS, vol. 66(1), pages 93-112, January.
    15. Umer, Hamza, 2020. "Revisiting generosity in the dictator game: Experimental evidence from Pakistan," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 84(C).
    16. François Cochard & Alexandre Flage & Gilles Grolleau & Angela Sutan, 2020. "Are individuals more generous in loss contexts?," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 55(4), pages 845-866, December.
    17. Ismael Rodriguez-Lara & Luis Moreno-Garrido, 2012. "Self-interest and fairness: self-serving choices of justice principles," Experimental Economics, Springer;Economic Science Association, vol. 15(1), pages 158-175, March.
    18. Alevy, Jonathan E. & Jeffries, Francis L. & Lu, Yonggang, 2014. "Gender- and frame-specific audience effects in dictator games," Economics Letters, Elsevier, vol. 122(1), pages 50-54.
    19. Ismael Rodriguez-Lara & Luis Moreno-Garrido, 2012. "Modeling Inequity Aversion in a Dictator Game with Production," Games, MDPI, vol. 3(4), pages 1-12, October.
    20. Lisa Bruttel & Florian Stolley, 2018. "Gender Differences in the Response to Decision Power and Responsibility—Framing Effects in a Dictator Game," Games, MDPI, vol. 9(2), pages 1-16, May.

    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:sae:ratsoc:v:27:y:2015:i:4:p:469-491. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.