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Similarity and social discounting

Author

Listed:
  • Benjamin Beranek

    (Missouri State University)

  • Geoffrey Castillo

    (Universität Wien = University of Vienna, VCEE - Vienna Center for Experimental Economics, University of Vienna)

Abstract

Social discounting refers to the idea that decision-makers discount payoffs as a function of social distance. We measure social distances via interpersonal similarity; that is, how similar or different others are to the decision-maker. In two large, pre-registered online experiments, subjects make repeated choices between options that provide different amounts of money to recipients at varying degrees of similarity. Our experiments control for a number of factors to cleanly measure preferences. We estimate a social discount function and find evidence for social discounting. Our estimates imply that a decision-maker would be indifferent between a dissimilar other receiving $1 or themselves receiving $0.83. In our second experiment where self is included as a potential recipient, we find evidence for quasi-hyperbolic social discounting.

Suggested Citation

  • Benjamin Beranek & Geoffrey Castillo, 2024. "Similarity and social discounting," Working Papers hal-04627788, HAL.
    • Handle: RePEc:hal:wpaper:hal-04627788
    Note: View the original document on HAL open archive server: https://hal.science/hal-04627788
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