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Social Preferences: Some Simple Tests and a New Model

  • Gary Charness and Matthew Rabin.

JEL#: A12, A13, B49, C70, C91, D63 Keywords: difference aversion, fairness, inequality aversion, maximin criterion, non-ultimatum games, reciprocal fairness, social preferences Departures from pure self interest in economic experiments have recently inspired models of "social preferences". We conduct experiments on simple two-person and three-person games with binary choices that test these theories more directly than the array of games conventionally considered. Our experiments show strong support for the prevalence of "quasi-maximin" preferences: People sacrifice to increase the payoff for all recipients, but especially for the lowest-payoff recipients. People are also motivated by reciprocity: While people are reluctant to sacrifice to reciprocate good or bad behavior beyond what they would sacrifice for neutral parties, they withdraw willingness to sacrifice to achieve a fair outcome when others are themselves unwilling to sacrifice. Some participants are averse to getting different payoffs than others, but based on our experiments and reinterpretation of previous experiments we argue that behavior that has been presented as "difference aversion" in recent papers is actually a combination of reciprocal and quasi-maximin motivations. We formulate a model in which each player is willing to sacrifice to allocate the quasi-maximin allocation only to those players also believed to be pursuing the quasi-maximin allocation, and may sacrifice to punish unfair players. June 2000

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Paper provided by University of California at Berkeley in its series Economics Working Papers with number E00-283.

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Date of creation: 01 Jun 2000
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Handle: RePEc:ucb:calbwp:e00-283
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  1. Armin Falk & Urs Fischbacher, 2001. "A Theory of Reciprocity," CESifo Working Paper Series 457, CESifo Group Munich.
  2. Robert Gibbons & Leaf Van Boven, 1999. "Contingent Social Utiltiy in the Prisoner's Dilemma," Levine's Working Paper Archive 2105, David K. Levine.
  3. Andreoni,J. & Brown,P.M. & Vesterlund,L., 1999. "What makes an allocation fair? : Some experimental evidence," Working papers 4, Wisconsin Madison - Social Systems.
  4. Rabin, Matthew, 2000. "Bargaining Structure, Fairness and Efficiency," Department of Economics, Working Paper Series qt8723s6r2, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  5. Brit Grosskopf, 2000. "Relative Payoffs and Happiness: An Experimental Study," Econometric Society World Congress 2000 Contributed Papers 1263, Econometric Society.
  6. Dufwenberg, Martin & Kirchsteiger, Georg, 2004. "A theory of sequential reciprocity," Games and Economic Behavior, Elsevier, vol. 47(2), pages 268-298, May.
  7. Gary E. Bolton & Axel Ockenfels, 1998. "Strategy and Equity: An ERC Analysis of the Guth-van Damme Game," Levine's Working Paper Archive 2060, David K. Levine.
  8. Jordi Brandts & Gary Charness, 1998. "Hot vs. cold: Sequential responses and preference stability in experimental games," Economics Working Papers 321, Department of Economics and Business, Universitat Pompeu Fabra.
  9. Jordi Brandts & Gary Charnes, . "Retribution In A Cheap-Talk Experiment," UFAE and IAE Working Papers 454.00, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  10. Güth, Werner & Huck, Steffen & Müller, Wieland, 1998. "The relevance of equal splits: On a behavioral discontinuity in ultimatum games," SFB 373 Discussion Papers 1998,7, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
  11. repec:dgr:uvatin:19990018 is not listed on IDEAS
  12. David K. Levine, 1998. "Modeling Altruism and Spitefulness in Experiment," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(3), pages 593-622, July.
  13. Matthew Rabin., 1992. "Incorporating Fairness into Game Theory and Economics," Economics Working Papers 92-199, University of California at Berkeley.
  14. 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.
  15. Brandts, Jordi & Sola, Carles, 2001. "Reference Points and Negative Reciprocity in Simple Sequential Games," Games and Economic Behavior, Elsevier, vol. 36(2), pages 138-157, August.
  16. Charness, Gary B, 1999. "Responsibility And Effort In An Experimental Labor Market," University of California at Santa Barbara, Economics Working Paper Series qt7x98w91h, Department of Economics, UC Santa Barbara.
  17. Gary Charness, 1996. "Attribution and reciprocity in a simulated labor market: An experimental investigation," Economics Working Papers 283, Department of Economics and Business, Universitat Pompeu Fabra, revised Oct 1997.
  18. Offerman, Theo & Sonnemans, Joep & Schram, Arthur, 1996. "Value Orientations, Expectations and Voluntary Contributions in Public Goods," Economic Journal, Royal Economic Society, vol. 106(437), pages 817-45, July.
  19. Timothy N. Cason & Vai-Lam Mui, 1998. "Social Influence in the Sequential Dictator Game," Monash Economics Working Papers archive-37, Monash University, Department of Economics.
  20. James Andreoni, 2001. "Giving According to GARP," Theory workshop papers 339, UCLA Department of Economics.
  21. Dufwenberg, M. & Kirchsteiger, G., 1998. "A Theory of Sequential Reciprocity," Discussion Paper 1998-37, .
  22. Blount, Sally, 1995. "When Social Outcomes Aren't Fair: The Effect of Causal Attributions on Preferences," Organizational Behavior and Human Decision Processes, Elsevier, vol. 63(2), pages 131-144, August.
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