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Accounting for context: Separating monetary and social incentives


  • Bergh, Andreas
  • Wichardt, Philipp


This paper proposes a simple framework to model social preferences in a game theoretic framework which explicitly separates economic incentives from social (context) effects. It is argued that such a perspective makes it easier to analyse contextual effects. Moreover, the framework is used to exemplify both theoretically and empirically how contextual variables such as social norms can worsen a social dilemma or possibly make it disappear. The empirical results of a randomised controlled classroom experiment show that women are more responsive to such contextual effects and that social agreements can also worsen economic inefficiencies.

Suggested Citation

  • Bergh, Andreas & Wichardt, Philipp, 2014. "Accounting for context: Separating monetary and social incentives," Kiel Working Papers 1971, Kiel Institute for the World Economy (IfW).
  • Handle: RePEc:zbw:ifwkwp:1971

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    References listed on IDEAS

    1. Hoffman Elizabeth & McCabe Kevin & Shachat Keith & Smith Vernon, 1994. "Preferences, Property Rights, and Anonymity in Bargaining Games," Games and Economic Behavior, Elsevier, vol. 7(3), pages 346-380, November.
    2. 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.
    3. Charness, Gary & Dufwenberg, Martin, 2003. "Promises & Partnership," Research Papers in Economics 2003:3, Stockholm University, Department of Economics.
    4. Gary Charness & Martin Dufwenberg, 2006. "Promises and Partnership," Econometrica, Econometric Society, vol. 74(6), pages 1579-1601, November.
    5. Andreoni, James, 1990. "Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving?," Economic Journal, Royal Economic Society, vol. 100(401), pages 464-477, June.
    6. 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.
    7. Ellingsen, Tore & Johannesson, Magnus & Mollerstrom, Johanna & Munkhammar, Sara, 2013. "Gender differences in social framing effects," Economics Letters, Elsevier, vol. 118(3), pages 470-472.
    8. Rabin, Matthew, 1993. "Incorporating Fairness into Game Theory and Economics," American Economic Review, American Economic Association, vol. 83(5), pages 1281-1302, December.
    9. Philipp C. Wichardt, 2011. "Identity, Utility, and Cooperative Behaviour: An Evolutionary Perspective," Scandinavian Journal of Economics, Wiley Blackwell, vol. 113, pages 418-443, June.
    10. Pierpaolo Battigalli & Martin Dufwenberg, 2007. "Guilt in Games," American Economic Review, American Economic Association, vol. 97(2), pages 170-176, May.
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    More about this item


    Context Effects; Efficiency; Social Norms; Social Preferences; Utility;

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • Z10 - Other Special Topics - - Cultural Economics - - - General


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