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Testing game theory without the social preference confound

Author

Listed:
  • Michał Krawczyk

    () (University of Warsaw, Faculty of Economic Sciences)

  • Fabrice Le Lec

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

Abstract

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.

Suggested Citation

  • Michał Krawczyk & Fabrice Le Lec, 2012. "Testing game theory without the social preference confound," Working Papers 2012-06, Faculty of Economic Sciences, University of Warsaw.
  • Handle: RePEc:war:wpaper:2012-06
    as

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    File URL: http://www.wne.uw.edu.pl/inf/wyd/WP/WNE_WP72.pdf
    File Function: First version, 2012
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    social preference; experimental game theory; ultimatum game; public goods game; trust game; prisoner's dilemma; dictator game;
    All these keywords.

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • C65 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Miscellaneous Mathematical Tools
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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