Tastes for Desert and Placation: A Reference Point-Dependent Model of Social Preferences

Research in Experimental Economics, Forthcoming

29 Pages Posted: 31 May 2017 Last revised: 31 Dec 2018

See all articles by Daniel L. Chen

Daniel L. Chen

Directeur de Recherche, Centre National de la Recherche Scientifique, Toulouse School of Economics, Institute for Advanced Study in Toulouse, University of Toulouse Capitole, Toulouse, France

Date Written: March 1, 2018

Abstract

I propose a model of behavior in social interactions where individuals maximize a three-term utility function: a conventional consumption utility term and two “social” terms that capture social preference. One social term is a taste for desert, which is maximized when the individual believes the other person is getting what they deserve. The second social term measures the target individuals’ anger or gratitude from the interaction which is determined by a value function derived from prospect theory. After introducing the model and generating a series of comparative statics results and derived predictions, I report the results of a series of quasi-field experiments on social preferences. I discuss how the model explains several paradoxes of empirical moral philosophy that are less explicable by current economic models of social preference focusing on outcomes and intentions.




Keywords: reference points, social preferences, just desert

JEL Classification: D6, K2

Suggested Citation

Chen, Daniel L., Tastes for Desert and Placation: A Reference Point-Dependent Model of Social Preferences (March 1, 2018). Research in Experimental Economics, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2977145 or http://dx.doi.org/10.2139/ssrn.2977145

Daniel L. Chen (Contact Author)

Directeur de Recherche, Centre National de la Recherche Scientifique, Toulouse School of Economics, Institute for Advanced Study in Toulouse, University of Toulouse Capitole, Toulouse, France ( email )

21 allée de Brienne
31015 Toulouse cedex 6 France
Toulouse, 31015
France

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