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Social preferences on networks

Author

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  • Rezaei, Sarah
  • Rosenkranz, Stephanie
  • Weitzel, Utz
  • Westbrock, Bastian

Abstract

Social preferences are a powerful determinant of human behavior. We study their behavioral implications within the context of a network game. A key feature of our game is the existence of multiple equilibria that widely differ in terms of their payoff distributions. Determining which equilibrium is most plausible is thus a key concern. We show that introducing social preferences into the game can resolve the problem of equilibrium multiplicity. However, the selected equilibria do not necessarily yield more efficient or egalitarian payoff distributions. Rather, they just reinforce the inequality that is already inherent in a network structure. We validate these predictions in an experiment and discuss their implications for managerial practice and behavior in larger networks.

Suggested Citation

  • Rezaei, Sarah & Rosenkranz, Stephanie & Weitzel, Utz & Westbrock, Bastian, 2024. "Social preferences on networks," Journal of Public Economics, Elsevier, vol. 234(C).
    • Handle: RePEc:eee:pubeco:v:234:y:2024:i:c:s0047272724000495
    DOI: 10.1016/j.jpubeco.2024.105113
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    References listed on IDEAS

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    1. Dong, Lu & Huang, Lingbo & Lien, Jaimie W. & Zheng, Jie, 2024. "How alliances form and conflict ensues," Games and Economic Behavior, Elsevier, vol. 146(C), pages 255-276.

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    More about this item

    Keywords

    Social preferences; Network games; Public goods;
    All these keywords.

    JEL classification:

    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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