Social Preferences: Some Simple Tests and a New Model

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Social Preferences: Some Simple Tests and a New Model

Author Info

Gary Charness and Matthew Rabin.

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Gary Charness

Abstract

JEL#: A12, A13, B49, C70, C91, D63
Keywords: difference aversion, fairness, inequality aversion, maximin criterion, non-ultimatum games, reciprocal fairness, social preferences
Departures from pure self interest in economic experiments have recently inspired models of "social preferences". We conduct experiments on simple two-person and three-person games with binary choices that test these theories more directly than the array of games conventionally considered. Our experiments show strong support for the prevalence of "quasi-maximin" preferences: People sacrifice to increase the payoff for all recipients, but especially for the lowest-payoff recipients. People are also motivated by reciprocity: While people are reluctant to sacrifice to reciprocate good or bad behavior beyond what they would sacrifice for neutral parties, they withdraw willingness to sacrifice to achieve a fair outcome when others are themselves unwilling to sacrifice. Some participants are averse to getting different payoffs than others, but based on our experiments and reinterpretation of previous experiments we argue that behavior that has been presented as "difference aversion" in recent papers is actually a combination of reciprocal and quasi-maximin motivations. We formulate a model in which each player is willing to sacrifice to allocate the quasi-maximin allocation only to those players also believed to be pursuing the quasi-maximin allocation, and may sacrifice to punish unfair players.
June 2000

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Paper provided by University of California at Berkeley in its series Economics Working Papers with number E00-283.

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Date of creation: 01 Jun 2000
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Handle: RePEc:ucb:calbwp:e00-283

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Paper
- Gary Charness & Matthew Rabin, 2000. "Social Preferences: Some Simple Tests and a New Model," Econometric Society World Congress 2000 Contributed Papers 1483, Econometric Society. [Downloadable!]
- Gary Charness & Matthew Rabin, 2001. "Social Preferences: Some Simple Tests and a New Model," General Economics and Teaching 0012002, EconWPA. [Downloadable!]
- Gary Charness & Matthew Rabin, 2000. "Social Preferences: Some Simple Tests and a New Model," Department of Economics, Working Paper Series 1030, Department of Economics, Institute for Business and Economic Research, UC Berkeley. [Downloadable!]
- Gary Charness & Matthew Rabin, 1999. "Social Preferences: Some Simple Tests and a New Model," Economics Working Papers 441, Department of Economics and Business, Universitat Pompeu Fabra, revised Jan 2000. [Downloadable!]

This paper has been announced in the following NEP Reports:

NEP-ALL-2000-08-15 (All new papers)

References listed on IDEAS
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repec:att:wimass:1919994 is not listed on IDEAS
James Andreoni, 2001. "Giving According to GARP," Theory workshop papers 339, UCLA Department of Economics. [Downloadable!]
Gary Charness & Jordi Brandts, 1998. "Hot vs. Cold: Sequential Responses and Preference Stability in Experimental Games," University of California at Santa Barbara, Economics Working Paper Series 36-98, Department of Economics, UC Santa Barbara. [Downloadable!]
Other versions:
- Jordi Brandts & Gary Charness, 1998. "Hot vs. Cold: Sequential Responses and Preference Stability in Experimental Games," Economics Working Papers 321, Department of Economics and Business, Universitat Pompeu Fabra. [Downloadable!]
- Brandts, J. & Charness, G., 1998. "Hot Vs. Cold: Sequential Responses and Preference Stability in Experimental Games," UFAE and IAE Working Papers 424.98, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Jordi Brandts & Gary Charness, 2000. "Hot vs. Cold: Sequential Responses and Preference Stability in Experimental Games," Experimental Economics, Springer, vol. 2(3), pages 227-238, March. [Downloadable!] (restricted)
Matthew Rabin, 1997. "Bargaining Structure, Fairness and Efficiency," Department of Economics, Working Paper Series 1033, Department of Economics, Institute for Business and Economic Research, UC Berkeley. [Downloadable!]
Adriana D. Kugler & Gilles Saint-Paul, 2004. "How Do Firing Costs Affect Worker Flows in a World with Adverse Selection?," Journal of Labor Economics, University of Chicago Press, vol. 22(3), pages 553-584, July. [Downloadable!]
Blount, Sally, 1995. "When Social Outcomes Aren't Fair: The Effect of Causal Attributions on Preferences," Organizational Behavior and Human Decision Processes, Elsevier, vol. 63(2), pages 131-144, August. [Downloadable!] (restricted)
Dufwenberg, M. & Kirchsteiger, G., 1998. "A theory of sequential reciprocity," Discussion Paper 37, Tilburg University, Center for Economic Research. [Downloadable!]
Other versions:
- Margin Dufwenberg & Georg Kirchsteiger, 2001. "A Theory of Sequential Reciprocity," Levine's Working Paper Archive 563824000000000090, David K. Levine. [Downloadable!]
- Dufwenberg, Martin & Kirchsteiger, Georg, 2004. "A theory of sequential reciprocity," Games and Economic Behavior, Elsevier, vol. 47(2), pages 268-298, May. [Downloadable!] (restricted)
Offerman, Theo & Sonnemans, Joep & Schram, Arthur, 1996. "Value Orientations, Expectations and Voluntary Contributions in Public Goods," Economic Journal, Royal Economic Society, vol. 106(437), pages 817-45, July. [Downloadable!] (restricted)
Brandts, J. & Sola, C., 1998. "Reference Points and Negative Reciprocity in Simple Sequential Games," UFAE and IAE Working Papers 425.98, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
David K. Levine, 1998. "Modeling Altruism and Spitefulness in Experiment," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(3), pages 593-622, July. [Downloadable!] (restricted)
Other versions:
- David K Levine, 1997. "Modeling Altruism and Spitefulness in Experiments," Levine's Working Paper Archive 2047, David K. Levine. [Downloadable!]
Gary E. Bolton & Axel Ockenfels, 1998. "Strategy and Equity: An ERC Analysis of the Guth-van Damme Game," Levine's Working Paper Archive 2060, David K. Levine. [Downloadable!]
Matthew Rabin., 1997. "Bargaining Structure, Fairness and Efficiency," Economics Working Papers E00-280, University of California at Berkeley. [Downloadable!]
Theo Offerman, 1999. "Hurting hurts more than Helping helps: The Role of the Self-serving Bias," Tinbergen Institute Discussion Papers 99-018/1, Tinbergen Institute. [Downloadable!]
Charness, Gary & Grosskopf, Brit, 2001. "Relative payoffs and happiness: an experimental study," Journal of Economic Behavior & Organization, Elsevier, vol. 45(3), pages 301-328, July. [Downloadable!] (restricted)
Other versions:
- Gary Charness & Brit Grosskopf, 1999. "Relative Payoffs and Happiness: An Experimental Study," Economics Working Papers 436, Department of Economics and Business, Universitat Pompeu Fabra, revised Jan 2000. [Downloadable!]
- Brit Grosskopf, 2000. "Relative Payoffs and Happiness: An Experimental Study," Econometric Society World Congress 2000 Contributed Papers 1263, Econometric Society. [Downloadable!]
- Gary Charness & Brit Grosskopf, 2000. "Relative Payoffs And Happiness: An Experimental Study," University of California at Santa Barbara, Economics Working Paper Series 13-00, Department of Economics, UC Santa Barbara. [Downloadable!]
Falk, Armin & Fischbacher, Urs, 2006. "A theory of reciprocity," Games and Economic Behavior, Elsevier, vol. 54(2), pages 293-315, February. [Downloadable!] (restricted)
Other versions:
- Armin Falk & Urs Fischbacher, . "A Theory of Reciprocity," IEW - Working Papers iewwp006, Institute for Empirical Research in Economics - IEW. [Downloadable!]
- Armin Falk & Urs Fischbacher, 2001. "A Theory of Reciprocity," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
- Falk, Armin & Fischbacher, Urs, 2001. "A Theory of Reciprocity," CEPR Discussion Papers 3014, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
Charness, Gary, 2000. "Responsibility and effort in an experimental labor market," Journal of Economic Behavior & Organization, Elsevier, vol. 42(3), pages 375-384, July. [Downloadable!] (restricted)
Other versions:
- Gary Charness, 1999. "Responsibility And Effort In An Experimental Labor Market," University of California at Santa Barbara, Economics Working Paper Series 16-99, Department of Economics, UC Santa Barbara. [Downloadable!]
Gary E. Bolton & Axel Ockenfels, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March. [Downloadable!] (restricted)
Rabin, Matthew, 1993. "Incorporating Fairness into Game Theory and Economics," American Economic Review, American Economic Association, vol. 83(5), pages 1281-1302, December. [Downloadable!] (restricted)
W. Güth & S. Huck & W. Müller, . "The relevance of equal splits - On behavioral discontinuity in ultimatum games," Sonderforschungsbereich 373 1998-7, Humboldt Universitaet Berlin.

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