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Spite and development

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Listed:
  • Fehr, Ernst
  • Hoff, Karla
  • Kshetramade, Mayuresh

Abstract

In a wide variety of settings, spiteful preferences would constitute an obstacle to cooperation, trade, and thus economic development. This paper shows that spiteful preferences - the desire to reduce another's material payoff for the mere purpose of increasing one's relative payoff - are surprisingly widespread in experiments conducted in one of the least developed regions in India (Uttar Pradesh). In a one-shot trust game, the authors find that a large majority of subjects punish cooperative behavior although such punishment clearly increases inequality and decreases the payoffs of both subjects. In experiments to study coordination and to measure social preferences, the findings reveal empirical patterns suggesting that the willingness to reduce another's material payoff - either for the sake of achieving more equality or for the sake of being ahead - is stronger among individuals belonging to high castes than among those belonging to low castes. Because extreme social hierarchies are typically accompanied by a culture that stresses status-seeking, it is plausible that the observed social preference patterns are at least partly shaped by this culture. Thus, an exciting question for future research is the extent to which different institutions and cultures produce preferences that are conducive or detrimental to economic development.

Suggested Citation

  • Fehr, Ernst & Hoff, Karla & Kshetramade, Mayuresh, 2008. "Spite and development," Policy Research Working Paper Series 4619, The World Bank.
  • Handle: RePEc:wbk:wbrwps:4619
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    References listed on IDEAS

    as
    1. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory of Fairness, Competition, and Cooperation," The Quarterly Journal of Economics, Oxford University Press, vol. 114(3), pages 817-868.
    2. Ernst Fehr & Simon Gachter & Georg Kirchsteiger, 1997. "Reciprocity as a Contract Enforcement Device: Experimental Evidence," Econometrica, Econometric Society, vol. 65(4), pages 833-860, July.
    3. Carpenter, Jeffrey P., 2007. "The demand for punishment," Journal of Economic Behavior & Organization, Elsevier, vol. 62(4), pages 522-542, April.
    4. Anderson, Christopher M. & Putterman, Louis, 2006. "Do non-strategic sanctions obey the law of demand? The demand for punishment in the voluntary contribution mechanism," Games and Economic Behavior, Elsevier, vol. 54(1), pages 1-24, January.
    5. repec:cup:apsrev:v:86:y:1992:i:02:p:404-417_08 is not listed on IDEAS
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    Citations

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    Cited by:

    1. Simon Gaechter & Benedikt Herrmann, 2006. "The limits of self-governance in the presence of spite: Experimental evidence from urban and rural Russia," Discussion Papers 2006-13, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    2. Banerjee, Ritwik & Gupta, Nabanita Datta & Villeval, Marie Claire, 2018. "The spillover effects of affirmative action on competitiveness and unethical behavior," European Economic Review, Elsevier, vol. 101(C), pages 567-604.
    3. Gächter, Simon & Herrmann, Benedikt, 2011. "The limits of self-governance when cooperators get punished: Experimental evidence from urban and rural Russia," European Economic Review, Elsevier, vol. 55(2), pages 193-210, February.
    4. Karla Hoff & Mayuresh Kshetramade & Ernst Fehr, 2011. "Caste and Punishment: the Legacy of Caste Culture in Norm Enforcement," Economic Journal, Royal Economic Society, vol. 121(556), pages 449-475, November.
    5. Banerjee, Ritwik & Gupta, Nabanita Datta & Villeval, Marie Claire, 2018. "The spillover effects of affirmative action on competitiveness and unethical behavior," European Economic Review, Elsevier, vol. 101(C), pages 567-604.
    6. Victoire GIRARD, 2017. "Stabbed in the back: Does sabotage follow mandated political representation?," LEO Working Papers / DR LEO 2544, Orleans Economics Laboratory / Laboratoire d'Economie d'Orleans (LEO), University of Orleans.
    7. Adrian Bruhin & Ernst Fehr & Daniel Schunk, 2016. "The Many Faces of Human Sociality: Uncovering the Distribution and Stability of Social Preferences," Working Papers 1603, Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz, revised 01 Feb 2016.
    8. repec:eee:ecolet:v:161:y:2017:i:c:p:71-73 is not listed on IDEAS
    9. d'Adda, Giovanna, 2011. "Motivation crowding in environmental protection: Evidence from an artefactual field experiment," Ecological Economics, Elsevier, vol. 70(11), pages 2083-2097, September.
    10. Hoff, Karla & Pandey, Priyanka, 2014. "Making up people—The effect of identity on performance in a modernizing society," Journal of Development Economics, Elsevier, vol. 106(C), pages 118-131.
    11. Prediger, Sebastian & Vollan, Björn & Herrmann, Benedikt, 2014. "Resource scarcity and antisocial behavior," Journal of Public Economics, Elsevier, vol. 119(C), pages 1-9.
    12. Bügelmayer, Elisabeth & Katharina Spiess, C., 2014. "Spite and cognitive skills in preschoolers," Journal of Economic Psychology, Elsevier, vol. 45(C), pages 154-167.
    13. Vollan, Björn, 2011. "The difference between kinship and friendship: (Field-) experimental evidence on trust and punishment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(1), pages 14-25, February.
    14. Sebastian Prediger, 2011. "How does income inequality affect cooperation and punishment in public good settings?," MAGKS Papers on Economics 201138, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    15. Mzoughi, Naoufel, 2011. "Farmers adoption of integrated crop protection and organic farming: Do moral and social concerns matter?," Ecological Economics, Elsevier, vol. 70(8), pages 1536-1545, June.
    16. Tomomi Tanaka & Colin F. Camerer, 2016. "Trait perceptions influence economic out-group bias: lab and field evidence from Vietnam," Experimental Economics, Springer;Economic Science Association, vol. 19(3), pages 513-534, September.
    17. Vollan, Bjorn & Prediger, Sebastian & Frolich, Markus, 2010. "The influence of collective property rights on grazing management in a semi-arid region," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 5(2), December.
    18. Bros, Catherine & Couttenier, Mathieu, 2015. "Untouchability, homicides and water access," Journal of Comparative Economics, Elsevier, vol. 43(3), pages 549-558.
    19. Elisabeth Gsottbauer & Jeroen den Bergh, 2013. "Bounded rationality and social interaction in negotiating a climate agreement," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 13(3), pages 225-249, September.
    20. Schosser, Stephan & Vogt, Bodo, 2011. "The public loss game: An experimental study of public bads," Working Paper Series in Economics 33, Karlsruhe Institute of Technology (KIT), Department of Economics and Business Engineering.
    21. Andreas Leibbrandt & Raúl López-Pérez, 2014. "Different carrots and different sticks: do we reward and punish differently than we approve and disapprove?," Theory and Decision, Springer, vol. 76(1), pages 95-118, January.
    22. Kimbrough Erik O. & Reiss J. Philipp, 2012. "Measuring the Distribution of Spitefulness," Research Memorandum 040, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    23. Espín, Antonio M. & Exadaktylos, Filippos & Neyse, Levent, 2016. "Heterogeneous Motives in the Trust Game: A Tale of Two Roles," Open Access Publications from Kiel Institute for the World Economy 141321, Kiel Institute for the World Economy (IfW).
    24. Kebede, Bereket & Zizzo, Daniel John, 2015. "Social Preferences and Agricultural Innovation: An Experimental Case Study from Ethiopia," World Development, Elsevier, vol. 67(C), pages 267-280.
    25. Stoelhorst, J.W. & Richerson, Peter J., 2013. "A naturalistic theory of economic organization," Journal of Economic Behavior & Organization, Elsevier, vol. 90(S), pages 45-56.

    More about this item

    Keywords

    Economic Theory&Research; Access to Finance; Debt Markets; Bankruptcy and Resolution of Financial Distress; Gender and Social Development;

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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