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Do Institutions Affect Social Preferences? Evidence from Divided Korea

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  • Kim, Byung-Yeon

    () (Seoul National University)

  • Choi, Syngjoo

    () (University College London)

  • Lee, Jungmin

    () (Seoul National University)

  • Lee, Sokbae

    () (Institute for Fiscal Studies, London)

  • Choi, Kyunghui

    () (University of Tokyo)

Abstract

The Cold War division of Korea, regarded as a natural experiment in institutional change, provides a unique opportunity to examine whether institutions affect social preferences. We recruited North Korean refugees and South Korean students to conduct laboratory experiments eliciting social preferences, together with standard surveys measuring subjective attitudes toward political and economic institutions. Our experiments employ widely used dictator and trust games, with four possible group matches between North and South Koreans by informing them of the group identity of their anonymous partners. Experimental behavior and support for institutions differ substantially between and within groups. North Korean refugees prefer more egalitarian distribution in the dictator games than South Korean students, even after controlling for individual characteristics that could be correlated with social preferences; however, two groups show little difference in the trust game, once we control for more egalitarian behavior of North Koreans. North Korean refugees show less support for market economy and democracy than South Korean subjects. Attitudes toward institutions are more strongly associated with the experimental behaviors among South Korean subjects than among North Korean subjects.

Suggested Citation

  • Kim, Byung-Yeon & Choi, Syngjoo & Lee, Jungmin & Lee, Sokbae & Choi, Kyunghui, 2013. "Do Institutions Affect Social Preferences? Evidence from Divided Korea," IZA Discussion Papers 7567, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp7567
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    Cited by:

    1. John, Katrin & Thomsen, Stephan L., 2015. "School-track environment or endowment: What determines different other-regarding behavior across peer groups?," Games and Economic Behavior, Elsevier, vol. 94(C), pages 122-141.
    2. Tom Lane, 2015. "Discrimination in the laboratory: a meta-analysis," Discussion Papers 2015-03, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.

    More about this item

    Keywords

    social preferences; experiment; institutions; market economy; democracy;

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • P20 - Economic Systems - - Socialist Systems and Transition Economies - - - General

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