Testing the Single-Peakedness of Other-Regarding Preferences

20 Pages Posted: 17 Jan 2019

See all articles by Maria Vittoria Levati

Maria Vittoria Levati

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Economics; University of Verona - Department of Economics

Aaron Nicholas

Deakin University

Birendra Rai

Monash University

Date Written: January 14, 2013

Abstract

We test an implication that is common to all prominent theories of outcome-based other-regarding preferences: the ordinal preference ranking of an agent over a finite number of alternatives lying on any straight line in the space of material payoffs to oneself and some other agent must be single-peaked or single-plateaued. An incentive compatible mechanism is used to elicit strict preference rankings of subjects over a finite set of alternatives in decision tasks based on dictator and trust games. Violations of single-peakedness range from a low of 19% to a high of 46% across the six main treatments. Other-regarding subjects violate single-peakedness significantly more often than self-regarding subjects. The presence of equal-split in the set of alternatives increases the number of violations. We argue that the violations cannot be explained by appealing to the relative ease of reporting certain rankings or as errors from the theoretical benchmark.

Keywords: Other-regarding preferences, single-peaked preferences, experiment

JEL Classification: C91, C70, D63

Suggested Citation

Levati, Maria Vittoria and Nicholas, Aaron and Rai, Birendra, Testing the Single-Peakedness of Other-Regarding Preferences (January 14, 2013). European Economic Review, Vol. 67, 2014, pp. 197-209.. Available at SSRN: https://ssrn.com/abstract=3315267

Maria Vittoria Levati

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Economics ( email )

Kahlaische Strasse 10
D-07745 Jena, 07745
Germany

University of Verona - Department of Economics ( email )

Via dell'Artigliere, 19
37129 Verona
Italy

Aaron Nicholas

Deakin University ( email )

75 Elgar Rd
Burwood, Victoria 3125
Australia

Birendra Rai (Contact Author)

Monash University ( email )

23 Innovation Walk
Wellington Road
Clayton, Victoria 3800
Australia

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