The Role of Equality and Efficiency in Social Preferences

13 Pages Posted: 13 Feb 2006

See all articles by Ernst Fehr

Ernst Fehr

University of Zurich - Department of Economics

Michael Naef

University of London, Royal Holloway College - Department of Economics; University of Zurich - Department of Economics

Klaus M. Schmidt

Ludwig Maximilian University of Munich (LMU) - Faculty of Economics; CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR)

Date Written: December 2005

Abstract

Engelmann and Strobel (AER 2004) question the relevance of inequity aversion in simple dictator game experiments claiming that a combination of a preference for efficiency and a Rawlsian motive for helping the least well-off is more important than inequity aversion. We show that these results are partly based on a strong subject pool effect. The participants of the E&S experiments were undergraduate students of economics and business administration who self-selected into their field of study (economics) and learned in the first semester that efficiency is desirable. We show that for non-economists the preference for efficiency is much less pronounced. We also find a non-negligible gender effect indicating that women are more egalitarian than men. However, perhaps surprisingly, the dominance of equality over efficiency is unrelated to political attitudes.

Keywords: Social preferences, inequity aversion, preferences for efficiency

JEL Classification: C7, C91, C92, D63, D64

Suggested Citation

Fehr, Ernst and Naef, Michael and Schmidt, Klaus M., The Role of Equality and Efficiency in Social Preferences (December 2005). CEPR Discussion Paper No. 5368, Available at SSRN: https://ssrn.com/abstract=883712

Ernst Fehr (Contact Author)

University of Zurich - Department of Economics ( email )

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Zuerich, 8006
Switzerland
+41 1 634 3709 (Phone)
+41 1 634 4907 (Fax)

Michael Naef

University of London, Royal Holloway College - Department of Economics ( email )

Royal Holloway College
Egham
Surrey, Surrey TW20 0EX
United Kingdom

University of Zurich - Department of Economics ( email )

Zuerich, 8006
Switzerland

Klaus M. Schmidt

Ludwig Maximilian University of Munich (LMU) - Faculty of Economics ( email )

Ludwigstrasse 28
Munich, D-80539
Germany
+49 89 2180 3405 (Phone)
+49 89 2180 3510 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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