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Heterogeneous Social Preferences

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Abstract

Recent research has shown the usefulness of social preferences for explaining behavior in laboratory experiments. This paper demonstrates that models of social preferences are particularly powerful in explaining behavior if they are embedded in a setting of heteroge-neous actors with heterogeneous (social) preferences. For this purpose a simple model is in-troduced that combines the basic ideas of inequity aversion, social welfare preferences, recip-rocity and heterogeneity. This model is applied to 43 games and it can be shown that its pre-dictive accuracy is clearly higher than that of the isolated approaches. Furthermore, it can explain most of the "anomalies" (the "contradictions") that are discussed in Goeree and Holt (2001).

Suggested Citation

  • Mathias Erlei, 2003. "Heterogeneous Social Preferences," TUC Working Papers in Economics 0001, Abteilung für Volkswirtschaftslehre, Technische Universität Clausthal (Department of Economics, Technical University Clausthal), revised Jun 2004.
    • Handle: RePEc:tuc:tucewp:0001
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    Cited by:

    1. Marie-Laure Cabon-Dhersin & Nathalie Etchart-Vincent, 2013. "Cooperation: The Power Of A Single Word? Some Experimental Evidence On Wording And Gender Effects In A Game Of Chicken," Bulletin of Economic Research, Wiley Blackwell, vol. 65(1), pages 43-64, January.
    2. Fadong Chen & Urs Fischbacher, 2020. "Cognitive processes underlying distributional preferences: a response time study," Experimental Economics, Springer;Economic Science Association, vol. 23(2), pages 421-446, June.
    3. Chang, Jae Bong & Lusk, Jayson L., 2009. "Fairness and food choice," Food Policy, Elsevier, vol. 34(6), pages 483-491, December.
    4. Kamas, Linda & Preston, Anne, 2012. "Distributive and reciprocal fairness: What can we learn from the heterogeneity of social preferences?," Journal of Economic Psychology, Elsevier, vol. 33(3), pages 538-553.
    5. Adrian Bruhin & Ernst Fehr & Daniel Schunk, 2019. "The many Faces of Human Sociality: Uncovering the Distribution and Stability of Social Preferences," Journal of the European Economic Association, European Economic Association, vol. 17(4), pages 1025-1069.
    6. Fadong Chen & Urs Fischbacher, 2015. "Cognitive Processes of Distributional Preferences: A Response Time Study," TWI Research Paper Series 101, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
    7. Boschini, Anne & Muren, Astri & Persson, Mats, 2013. "The Social Egoist," Research Papers in Economics 2013:14, Stockholm University, Department of Economics.
    8. Leonardo Becchetti & Vittorio Pelligra & Francesco Salustri, 2017. "Testing for heterogeneity of preferences in randomized experiments: a satisfaction-based approach applied to multiplayer prisoners’ dilemmas," Applied Economics Letters, Taylor & Francis Journals, vol. 24(10), pages 722-726, June.
    9. Robson, Matthew, 2021. "Inequality aversion, self-interest and social connectedness," Journal of Economic Behavior & Organization, Elsevier, vol. 183(C), pages 744-772.
    10. Ispano, Alessandro, 2015. "A note on the equilibria of the unbounded traveler’s dilemma," Mathematical Social Sciences, Elsevier, vol. 77(C), pages 52-54.
    11. Marcelo Tyszler & Arthur Schram, 2013. "Strategic Voting in Heterogeneous Electorates: An Experimental Study," Games, MDPI, vol. 4(4), pages 1-24, November.
    12. Khan, Hayat, 2009. "Modeling Social Preferences: A Generalized Model of Inequity Aversion," MPRA Paper 14701, University Library of Munich, Germany, revised 01 Apr 2009.
    13. Linda Kamas & Anne Preston, 2012. "Gender and Social Preferences in the US: An Experimental Study," Feminist Economics, Taylor & Francis Journals, vol. 18(1), pages 135-160, January.
    14. John D. Marvel, 2020. "Evolution and egalitarianism: A behavioral account of managers' performance pay decisions," Journal of Behavioral Public Administration, Center for Experimental and Behavioral Public Administration, vol. 3(2).
    15. Marie-Laure Cabon-Dhersin & Nathalie Etchart-Vincent, 2012. "The puzzle of cooperation in a game of chicken: an experimental study," Theory and Decision, Springer, vol. 72(1), pages 65-87, January.
    16. Erlei Mathias & Schenk-Mathes Heike, 2017. "Bounded Rationality in Principal-Agent Relationships," German Economic Review, De Gruyter, vol. 18(4), pages 411-443, December.
    17. Tilman Becker & Michael Carter & Jörg Naeve, 2005. "Experts Playing the Traveler's Dilemma," Diskussionspapiere aus dem Institut für Volkswirtschaftslehre der Universität Hohenheim 252/2005, Department of Economics, University of Hohenheim, Germany.
    18. Kurt A. Ackermann & Ryan O. Murphy, 2019. "Explaining Cooperative Behavior in Public Goods Games: How Preferences and Beliefs Affect Contribution Levels," Games, MDPI, vol. 10(1), pages 1-34, March.
    19. Deborah Kerley Keisner & Kent D. Messer & William D. Schulze & Homa Zarghamee, 2013. "Testing Social Preferences for an Economic “Bad”: An Artefactual Field Experiment," Scandinavian Journal of Economics, Wiley Blackwell, vol. 115(1), pages 27-61, January.
    20. Zarri, Luca, 2008. "Endogenous Social Preferences, Heterogeneity and Cooperation," AICCON Working Papers 51-2008, Associazione Italiana per la Cultura della Cooperazione e del Non Profit.
    21. Fehr, Ernst & Schmidt, Klaus M., 2005. "The Economics of Fairness, Reciprocity and Altruism – Experimental Evidence and New Theories," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 66, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    22. Bolle, Friedel & Liepmann, Hannah & Vogel, Claudia, 2012. "How much social insurance do you want? An experimental study," Journal of Economic Psychology, Elsevier, vol. 33(6), pages 1170-1181.
    23. Paetzel, Fabian & Traub, Stefan, 2017. "Skewness-adjusted social preferences: Experimental evidence on the relation between inequality, elite behavior, and economic efficiency," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 68(C), pages 130-139.

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    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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