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Testing game theory without the social preference confound

  • Michał Krawczyk


    (University of Warsaw, Faculty of Economic Sciences)

  • Fabrice Le Lec


    (Catholic University of Lille, Lille Economie & Management UMR CNRS 8179)

We propose an experimental method whose purpose is to induce selfish behavior in games for a broad class of social preferences. It provides a theoretical framework for testing game theoretical predictions by confronting subjects with a commonly known payoff matrix actually representing their preferences. The paper describes the empirical tests of this method based on the comparison of results from several popular experimental games played with and without our methodology. Apart from it being a test of validity of the method, our experiment helps answer the question of how useful social preferences could be in explaining commonly observed deviations from selfish rationality. Results suggest that our method does induce more selfish behaviors: a substantial part of the difference between predictions based on selfishness and observed behaviors seems indeed driven by such preferences. But they also indicate that a considerable share is left untouched, perhaps giving weight to alternative explanations.

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Paper provided by Faculty of Economic Sciences, University of Warsaw in its series Working Papers with number 2012-06.

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Length: 30 pages
Date of creation: 2012
Date of revision:
Handle: RePEc:war:wpaper:2012-06
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  1. James Andreoni & Emily Blanchard, 2006. "Testing subgame perfection apart from fairness in ultimatum games," Experimental Economics, Springer, vol. 9(4), pages 307-321, December.
  2. Gary Charness & Matthew Rabin, 2003. "Understanding Social Preferences with Simple Tests," General Economics and Teaching 0303002, EconWPA.
  3. Fehr, Ernst & Schmidt, Klaus M., 1999. "A theory of fairness, competition, and cooperation," Munich Reprints in Economics 20650, University of Munich, Department of Economics.
  4. Greiner, Ben, 2004. "An Online Recruitment System for Economic Experiments," MPRA Paper 13513, University Library of Munich, Germany.
  5. Cox, J. & Friedman, D. & Gjerstad, S., 2006. "A Trackable Model of Reciprocity and Fairness," Purdue University Economics Working Papers 1181, Purdue University, Department of Economics.
  6. Trautmann, Stefan T., 2009. "A tractable model of process fairness under risk," Journal of Economic Psychology, Elsevier, vol. 30(5), pages 803-813, October.
  7. Michal Krawczyk, 2011. "A model of procedural and distributive fairness," Theory and Decision, Springer, vol. 70(1), pages 111-128, January.
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