Understanding Social Preference with Simple Tests

Univ. Pompeu Fabra, Economics and Business Working Paper No. 441

56 Pages Posted: 26 Jun 2000

See all articles by Gary Charness

Gary Charness

University of California, Santa Barbara (UCSB) - Department of Economics

Matthew Rabin

University of California, Berkeley - Department of Economics

Date Written: August 2001

Abstract

Departures from self-interest in economic experiments have recently inspired models of ?social preferences?. We design a range of simple experimental games that test these theories more directly than existing experiments. Our experiments show that subjects are more concerned with increasing social welfare?sacrificing to increase the payoffs for all recipients, especially low-payoff recipients?than with reducing differences in payoffs (as supposed in recent models). Subjects are also motivated by reciprocity: They withdraw willingness to sacrifice to achieve a fair outcome when others are themselves unwilling to sacrifice, and sometimes punish unfair behavior.

Keywords: Difference Aversion, Fairness, Inequity Aversion, Social Welfare, Non-Ultimatum Games, Reciprocal Fairness, Social Preferences, Ultimatum Games.

JEL Classification: A12, A13, B49, C70, C91, D63

Suggested Citation

Charness, Gary and Rabin, Matthew, Understanding Social Preference with Simple Tests (August 2001). Univ. Pompeu Fabra, Economics and Business Working Paper No. 441. Available at SSRN: https://ssrn.com/abstract=224577 or http://dx.doi.org/10.2139/ssrn.224577

Gary Charness (Contact Author)

University of California, Santa Barbara (UCSB) - Department of Economics ( email )

2127 North Hall
Santa Barbara, CA 93106
United States
805-893-2412 (Phone)
805-893-8830 (Fax)

Matthew Rabin

University of California, Berkeley - Department of Economics ( email )

549 Evans Hall #3880
Berkeley, CA 94720-3880
United States

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