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Would The Right Social Preference Model Please Stand Up!

  • Daruvala, Dinky


    (Karlstad University)

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    A number of competing social preference models have been developed inspired by the evidence from economic experiments. We test the relative performance of some of these models using an experimental design that is aimed at capturing pure distributional concerns in a multi-person setting. We find that the individuals in this study are heterogeneous and that they do not follow any single notion of fairness or inequality aversion. In addition, the results suggest that efficiency concerns are not confined to students of economics but are important to students of all disciplines.

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    Paper provided by University of Gothenburg, Department of Economics in its series Working Papers in Economics with number 210.

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    Length: 21 pages
    Date of creation: 14 Aug 2006
    Date of revision:
    Handle: RePEc:hhs:gunwpe:0210
    Contact details of provider: Postal: Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden
    Phone: 031-773 10 00
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    1. Fehr, Ernst & Schmidt, Klaus M., 2001. "Theories of Fairness and Reciprocity - Evidence and Economic Applications," CEPR Discussion Papers 2703, C.E.P.R. Discussion Papers.
    2. Fehr, Ernst & Schmidt, Klaus M., 2004. "The Role of Equality, Efficiency, and Rawlsian Motives in Social Preferences: A Reply to Engelmann and Strobel," Munich Reprints in Economics 20655, University of Munich, Department of Economics.
    3. Matthew Rabin., 1992. "Incorporating Fairness into Game Theory and Economics," Economics Working Papers 92-199, University of California at Berkeley.
    4. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory Of Fairness, Competition, And Cooperation," The Quarterly Journal of Economics, MIT Press, vol. 114(3), pages 817-868, August.
    5. 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.
    6. Gary Charness & Matthew Rabin, 2002. "Understanding Social Preferences With Simple Tests," The Quarterly Journal of Economics, MIT Press, vol. 117(3), pages 817-869, August.
    7. Guillaume R. Frechette & John H. Kagel & Steven Lehrer, 2000. "Bargaining in Legislatures: An Experimental Investigation of Open versus Closed Amendment Rules," Econometric Society World Congress 2000 Contributed Papers 1515, Econometric Society.
    8. John Kagel & Katherine Wolfe, 2001. "Tests of Fairness Models Based on Equity Considerations in a Three-Person Ultimatum Game," Experimental Economics, Springer, vol. 4(3), pages 203-219, December.
    9. Guth, Werner & Kliemt, Hartmut & Ockenfels, Axel, 2003. "Fairness versus efficiency: An experimental study of (mutual) gift giving," Journal of Economic Behavior & Organization, Elsevier, vol. 50(4), pages 465-475, April.
    10. Kritikos, Alexander & Bolle, Friedel, 2001. "Distributional concerns: equity- or efficiency-oriented?," Economics Letters, Elsevier, vol. 73(3), pages 333-338, December.
    11. 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.
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