Random Dictators: A First Investigation into Social Von Neumann Morgenstern Preferences

20 Pages Posted: 25 Aug 2010

See all articles by Jim Engle-Warnick

Jim Engle-Warnick

McGill University - Department of Economics

Steffen Huck

University College London - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Hans-Theo Normann

Heinrich Heine University Dusseldorf - Department of Economics; Max Planck Institute for Research on Collective Goods

Date Written: September 2008

Abstract

We analyse behavior in lottery choice problems that assign payoffs to the decision maker and one other subject. Lotteries are based on randomly generated 2x2 games where the column player’s choice is replaced by a draw from an urn. We find that the vast majority of subjects displays behavior that might have been generated by a monotone von Neumann Morgenstern utility function. Remarkably, most subjects appear to be fully selfish. We also compare behavior in these lotteries with actual game playing.

Keywords: Social preferences, von Neumann Morgenstern utility, uncertainty

JEL Classification: C72, C90

Suggested Citation

Engle-Warnick, Jim and Huck, Steffen and Normann, Hans-Theo, Random Dictators: A First Investigation into Social Von Neumann Morgenstern Preferences (September 2008). Available at SSRN: https://ssrn.com/abstract=1664257 or http://dx.doi.org/10.2139/ssrn.1664257

Jim Engle-Warnick

McGill University - Department of Economics ( email )

855 Sherbrooke Street West
Montreal, QC H3A 2T7
Canada

Steffen Huck

University College London - Department of Economics ( email )

Gower Street
London WC1E 6BT, WC1E 6BT
United Kingdom
+44 207 679 5895 (Phone)
+44 207 916 2774 (Fax)

HOME PAGE: http://www.ucl.ac.uk/~uctpshu/

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Hans-Theo Normann (Contact Author)

Heinrich Heine University Dusseldorf - Department of Economics ( email )

Duesseldorf
Germany

Max Planck Institute for Research on Collective Goods ( email )

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany

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