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
Date Written: March 1, 2018
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: Suggested Citation