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Does Entitlement Crowd Out Efficiency or Equality Seeking? - Selling the Roles in Generosity Game Experiments -

Author

Listed:
  • Agnes Bäker

    () (Eberhard Karls Universität Tübingen)

  • Werner Güth

    () (Max Planck Institute of Economics, Strategic Interaction Group)

  • Kerstin Pull

    (Eberhard Karls Universität Tübingen)

  • Manfred Stadler

    (Eberhard Karls Universität Tübingen)

Abstract

In generosity games, one agreement payoff is exogenously given, whereas the other is endogenously determined by the proposer's choice of the "pie" size. This has been shown to induce pie choices which are either efficiency or equality seeking. In our experiment, before playing the generosity game, participants are asked to buy their role via a random price mechanism. This should entitle them to exploit the chances which their role provides and at the same time avoid the selection bias of competitive auctions. We find that entitlement crowds out equality seeking and strengthens efficiency seeking. Interpreting participants' willingness to pay as an aspiration level of how much they want to earn, our design further allows us to test for satisficing behavior. Indeed, we find evidence for satisficing behavior in the data.

Suggested Citation

  • Agnes Bäker & Werner Güth & Kerstin Pull & Manfred Stadler, 2010. "Does Entitlement Crowd Out Efficiency or Equality Seeking? - Selling the Roles in Generosity Game Experiments -," Jena Economic Research Papers 2010-091, Friedrich-Schiller-University Jena.
  • Handle: RePEc:jrp:jrpwrp:2010-091
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    File URL: http://link.springer.com/article/10.1007%2Fs11238-013-9364-5
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    References listed on IDEAS

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    1. Werner Güth & M. Vittoria Levati & Matteo Ploner, 2009. "Making the World a better Place: Experimental evidence from the generosity Game," Jena Economic Research Papers 2009-071, Friedrich-Schiller-University Jena.
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    Cited by:

    1. Güth, Werner & Kocher, Martin G., 2014. "More than thirty years of ultimatum bargaining experiments: Motives, variations, and a survey of the recent literature," Journal of Economic Behavior & Organization, Elsevier, vol. 108(C), pages 396-409.

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    More about this item

    Keywords

    Entitlement; Generosity Game; Efficiency Seeking; Inequity Aversion; Satisficing;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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