IDEAS home Printed from https://ideas.repec.org/p/zbw/zewdip/6088.html
   My bibliography  Save this paper

Inequity Aversion and Individual Behavior in Public Good Games: An Experimental Investigation

Author

Listed:
  • Sturm, Bodo
  • Riechmann, Thomas
  • Dannenberg, Astrid
  • Vogt, Carsten

Abstract

We present a simple two-steps procedure for a within-subject test of the inequity aversion model of Fehr and Schmidt (1999). In the first step, subjects played modified ultimatum and dictator games and were classified according to their preferences. In the second step, subjects with specific preferences according to the Fehr and Schmidt model were matched into pairs and interacted with each other in a standard public good game and a public good game with punishment possibility. Our results show that the specific composition of groups significantly influences the subjects' performance in the public good games. We identify the aversion against advantageous inequity and the information about the coplayer's type as the main influencing factors for the behavior of subjects.

Suggested Citation

  • Sturm, Bodo & Riechmann, Thomas & Dannenberg, Astrid & Vogt, Carsten, 2007. "Inequity Aversion and Individual Behavior in Public Good Games: An Experimental Investigation," ZEW Discussion Papers 07-034 [rev.], ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:6088
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/24620/1/dp07034.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Robert H. Frank & Thomas Gilovich & Dennis T. Regan, 1993. "Does Studying Economics Inhibit Cooperation?," Journal of Economic Perspectives, American Economic Association, vol. 7(2), pages 159-171, Spring.
    2. Falk, Armin & Fischbacher, Urs, 2006. "A theory of reciprocity," Games and Economic Behavior, Elsevier, vol. 54(2), pages 293-315, February.
    3. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard H, 1986. "Fairness and the Assumptions of Economics," The Journal of Business, University of Chicago Press, vol. 59(4), pages 285-300, October.
    4. Dufwenberg, Martin & Kirchsteiger, Georg, 2004. "A theory of sequential reciprocity," Games and Economic Behavior, Elsevier, vol. 47(2), pages 268-298, May.
    5. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory of Fairness, Competition, and Cooperation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(3), pages 817-868.
    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. Forsythe Robert & Horowitz Joel L. & Savin N. E. & Sefton Martin, 1994. "Fairness in Simple Bargaining Experiments," Games and Economic Behavior, Elsevier, vol. 6(3), pages 347-369, May.
    8. Ernst Fehr & Simon Gächter, 2002. "Altruistic punishment in humans," Nature, Nature, vol. 415(6868), pages 137-140, January.
    9. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
    10. Jeanette Brosig & Thomas Riechmann & Joachim Weimann, 2007. "Selfish in the end? An investigation of consistency and stability of individual behaviour," FEMM Working Papers 07005, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
    11. Fehr, Ernst & Schmidt, Klaus M., 2006. "The Economics of Fairness, Reciprocity and Altruism - Experimental Evidence and New Theories," Handbook on the Economics of Giving, Reciprocity and Altruism, in: S. Kolm & Jean Mercier Ythier (ed.), Handbook of the Economics of Giving, Altruism and Reciprocity, edition 1, volume 1, chapter 8, pages 615-691, Elsevier.
    12. Rabin, Matthew, 1993. "Incorporating Fairness into Game Theory and Economics," American Economic Review, American Economic Association, vol. 83(5), pages 1281-1302, December.
    13. Guth, Werner & Schmittberger, Rolf & Schwarze, Bernd, 1982. "An experimental analysis of ultimatum bargaining," Journal of Economic Behavior & Organization, Elsevier, vol. 3(4), pages 367-388, December.
    14. Blanco, Mariana & Engelmann, Dirk & Normann, Hans Theo, 2011. "A within-subject analysis of other-regarding preferences," Games and Economic Behavior, Elsevier, vol. 72(2), pages 321-338, June.
    15. Simon Gachter & Ernst Fehr, 2000. "Cooperation and Punishment in Public Goods Experiments," American Economic Review, American Economic Association, vol. 90(4), pages 980-994, September.
    16. Marwell, Gerald & Ames, Ruth E., 1981. "Economists free ride, does anyone else? : Experiments on the provision of public goods, IV," Journal of Public Economics, Elsevier, vol. 15(3), pages 295-310, June.
    17. John R. Carter & Michael D. Irons, 1991. "Are Economists Different, and If So, Why?," Journal of Economic Perspectives, American Economic Association, vol. 5(2), pages 171-177, Spring.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Al-Ubaydli, Omar & Lee, Min Sok, 2009. "An experimental study of asymmetric reciprocity," Journal of Economic Behavior & Organization, Elsevier, vol. 72(2), pages 738-749, November.
    2. Nieken, Petra & Schmitz, Patrick W., 2012. "Repeated moral hazard and contracts with memory: A laboratory experiment," Games and Economic Behavior, Elsevier, vol. 75(2), pages 1000-1008.
    3. Sabrina Teyssier, 2012. "Inequity and risk aversion in sequential public good games," Public Choice, Springer, vol. 151(1), pages 91-119, April.
    4. Hedegaard, Morten & Kerschbamer, Rudolf & Müller, Daniel & Tyran, Jean-Robert, 2021. "Distributional preferences explain individual behavior across games and time," Games and Economic Behavior, Elsevier, vol. 128(C), pages 231-255.
    5. Dannenberg, Astrid & Riechmann, Thomas & Sturm, Bodo & Vogt, Carsten, 2010. "Stability and explanatory power of inequality aversion: an investigation of the house money effect," ZEW Discussion Papers 10-006, ZEW - Leibniz Centre for European Economic Research.
    6. Johannes Berger & Christine Harbring & Dirk Sliwka, 2013. "Performance Appraisals and the Impact of Forced Distribution--An Experimental Investigation," Management Science, INFORMS, vol. 59(1), pages 54-68, June.
    7. Kräkel, Matthias & Nieken, Petra & Przemeck, Judith, 2014. "Risk taking and investing in electoral competition," European Journal of Political Economy, Elsevier, vol. 33(C), pages 98-120.
    8. Haoran He & Marie Claire Villeval, 2014. "Are teams less inequality averse than individuals?," Post-Print halshs-01077253, HAL.
    9. Eisenkopf, Gerald & Teyssier, Sabrina, 2013. "Envy and loss aversion in tournaments," Journal of Economic Psychology, Elsevier, vol. 34(C), pages 240-255.
    10. Yang, Yang & Onderstal, Sander & Schram, Arthur, 2016. "Inequity aversion revisited," Journal of Economic Psychology, Elsevier, vol. 54(C), pages 1-16.
    11. He, Haoran & Wu, Keyu, 2016. "Choice set, relative income, and inequity aversion: An experimental investigation," Journal of Economic Psychology, Elsevier, vol. 54(C), pages 177-193.
    12. Fabian Kleine & Manfred Königstein & Balázs Rozsnyói, 2018. "Voluntary Leadership and Asymmetric Endowments in the Investment Game," Games, MDPI, vol. 9(3), pages 1-21, July.
    13. Sabrina Teyssier, 2008. "Experimental Evidence on Inequity Aversion and Self-Selection between Incentive Contracts," Working Papers 0821, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    14. Weiwei Tasch & Daniel Houser, 2018. "Social Preferences and Social Curiosity," CESifo Working Paper Series 7132, CESifo.
    15. Benjamin Beranek & Robin Cubitt & Simon Gächter, 2015. "Stated and revealed inequality aversion in three subject pools," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 1(1), pages 43-58, July.
    16. Ockenfels, Axel & Sliwka, Dirk & Werner, Peter, 2024. "Multi-Rater Performance Evaluations and Incentives," IZA Discussion Papers 16812, Institute of Labor Economics (IZA).
    17. Grund, Christian & Przemeck, Judith, 2008. "Subjective Performance Evaluation and Inequality Aversion," IZA Discussion Papers 3382, Institute of Labor Economics (IZA).
    18. He, Haoran & Villeval, Marie Claire, 2017. "Are group members less inequality averse than individual decision makers?," Journal of Economic Behavior & Organization, Elsevier, vol. 138(C), pages 111-124.
    19. Alfred Endres, 2008. "Ein Unmöglichkeitstheorem für die Klimapolitik?," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 9(3), pages 350-382, August.
    20. Normann, Hans-Theo & Rau, Holger A., 2014. "Simultaneous and sequential contributions to step-level public goods: One vs. two provision levels," DICE Discussion Papers 135, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    21. Haoran He & Marie Claire Villeval, 2014. "Are team members less inequality averse than individual decision makers?," Working Papers halshs-00996545, HAL.
    22. Liu, Weihua & Wang, Di & Shen, Xinran & Yan, Xiaoyu & Wei, Wanying, 2018. "The impacts of distributional and peer-induced fairness concerns on the decision-making of order allocation in logistics service supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 116(C), pages 102-122.
    23. Francesca Bortolami & Luigi Mittone, 2009. "Does Participating in a Collective Decision Affect the Levels of Contributions Provided? An Experimental Investigation," CEEL Working Papers 0902, Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Weiwei Tasch & Daniel Houser, 2018. "Social Preferences and Social Curiosity," Working Papers 1067, George Mason University, Interdisciplinary Center for Economic Science.
    2. Thorsten Chmura & Christoph Engel & Markus Englerth, 2013. "Selfishness As a Potential Cause of Crime. A Prison Experiment," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2013_05, Max Planck Institute for Research on Collective Goods.
    3. Felix Koelle, 2012. "Heterogeneity and Cooperation in Privileged Groups: The Role of Capability and Valuation on Public Goods Provision," Cologne Graduate School Working Paper Series 03-08, Cologne Graduate School in Management, Economics and Social Sciences.
    4. Simon Gaechter, 2014. "Human Pro-Social Motivation and the Maintenance of Social Order," Discussion Papers 2014-02, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    5. Bodo Sturm & Joachim Weimann, 2006. "Experiments in Environmental Economics and Some Close Relatives," Journal of Economic Surveys, Wiley Blackwell, vol. 20(3), pages 419-457, July.
    6. Bart J. Wilson, 2012. "Contra Private Fairness," American Journal of Economics and Sociology, Wiley Blackwell, vol. 71(2), pages 407-435, April.
    7. Klaus M. Schmidt, 2011. "Social Preferences and Competition," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 43, pages 207-231, August.
    8. Reuben, Ernesto & Riedl, Arno, 2013. "Enforcement of contribution norms in public good games with heterogeneous populations," Games and Economic Behavior, Elsevier, vol. 77(1), pages 122-137.
    9. Kerschbamer, Rudolf, 2015. "The geometry of distributional preferences and a non-parametric identification approach: The Equality Equivalence Test," European Economic Review, Elsevier, vol. 76(C), pages 85-103.
    10. Reuben, Ernesto & van Winden, Frans, 2008. "Social ties and coordination on negative reciprocity: The role of affect," Journal of Public Economics, Elsevier, vol. 92(1-2), pages 34-53, February.
    11. Rachel Croson & Uri Gneezy, 2009. "Gender Differences in Preferences," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 448-474, June.
    12. Kölle, Felix, 2015. "Heterogeneity and cooperation: The role of capability and valuation on public goods provision," Journal of Economic Behavior & Organization, Elsevier, vol. 109(C), pages 120-134.
    13. Ernesto Reuben & Frans van Winden, 2004. "Reciprocity and Emotions when Reciprocators know each other," Tinbergen Institute Discussion Papers 04-098/1, Tinbergen Institute.
    14. Murnighan, J. Keith & Wang, Long, 2016. "The social world as an experimental game," Organizational Behavior and Human Decision Processes, Elsevier, vol. 136(C), pages 80-94.
    15. Klaus M. Schmidt, 2011. "Social Preferences and Competition," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 43(s1), pages 207-231, August.
    16. Ch'ng, Kean Siang & Loke, Yiing Jia, 2010. "Inconsistency of fairness evaluation in simulated labot market," MPRA Paper 21527, University Library of Munich, Germany.
    17. Klaus M. Schmidt & Martin Spann & Robert Zeithammer, 2015. "Pay What You Want as a Marketing Strategy in Monopolistic and Competitive Markets," Management Science, INFORMS, vol. 61(6), pages 1217-1236, June.
    18. Barmettler, Franziska & Fehr, Ernst & Zehnder, Christian, 2012. "Big experimenter is watching you! Anonymity and prosocial behavior in the laboratory," Games and Economic Behavior, Elsevier, vol. 75(1), pages 17-34.
    19. Leibbrandt, Andreas & López-Pérez, Raúl, 2012. "An exploration of third and second party punishment in ten simple games," Journal of Economic Behavior & Organization, Elsevier, vol. 84(3), pages 753-766.
    20. Jacobs Martin, 2016. "Accounting for Changing Tastes: Approaches to Explaining Unstable Individual Preferences," Review of Economics, De Gruyter, vol. 67(2), pages 121-183, August.

    More about this item

    Keywords

    individual preferences; inequity aversion; experimental economics; public goods;
    All these keywords.

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:zewdip:6088. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/zemande.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.