Giving According to Agreement

CentER Discussion Paper Nr. 2020-035

37 Pages Posted: 21 Feb 2021

See all articles by Jan Heufer

Jan Heufer

Erasmus University Rotterdam (EUR) - Department of Applied Economics; Tinbergen Institute

Paul van Bruggen

affiliation not provided to SSRN

Jingni Yang

affiliation not provided to SSRN

Date Written: December 21, 2020

Abstract

We propose an axiom that we call Agreement to deal with changing preferences and derive its empirical implications. The resulting revealed preference condition generalises GARP when preferences are different but preferences in one context are informative about preferences in another context. We apply this idea to a social choice experiment, where a player can respond to another player being kind or relatively unkind. We find that people have a consistent preferences for each case, but that preferences depend on the kindness of the other player, and that subjects act in line with Agreement. We thus provide support for modelling and interpreting responses to the intentions of other players as a preference for reciprocity.

Keywords: social preferences, reciprocity, nonparametric methods

JEL Classification: D11, C14, D91

Suggested Citation

Heufer, Jan and van Bruggen, Paul and Yang, Jingni, Giving According to Agreement (December 21, 2020). CentER Discussion Paper Nr. 2020-035, Available at SSRN: https://ssrn.com/abstract=3752800 or http://dx.doi.org/10.2139/ssrn.3752800

Jan Heufer (Contact Author)

Erasmus University Rotterdam (EUR) - Department of Applied Economics ( email )

Netherlands

Tinbergen Institute ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Paul Van Bruggen

affiliation not provided to SSRN

Jingni Yang

affiliation not provided to SSRN

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