Direct Tests of Models of Social Preferences and a New Model

Abstract

Departures from "economic man" behavior in many games in which fairness is a salient characteristic are now well documented in the experimental economics literature. These data have inspired development of new models of social preferences incorporating inequality aversion and quasi-maximin preferences. We report experiments that provide direct tests of these social preference models. Data from the experiments motivate a new model of egocentric altruism. The model rationalizes data from our direct test experiments and data from experiments with proposer competition and responder competition. We discuss generalizations of the egocentric altruism model that incorporate agents' intentions and thus provide a unified approach to modeling behavior in games both with and without reciprocal motivation.

Keywords: Social preferences, fairness, experiments

JEL Classification: A12, A13, B49, C70, C91, D63