Social Preferences

Title:

UNDERSTANDING SOCIAL PREFERENCES WITH SIMPLE TESTS

Authors:

Gary Charness

Mattew Rabin

Reference:

Charness,Gary and Mattew Rabin (2002), " Understanding Social Preferences With Simple Tests",The Quarterly Journal of Economics, 3(117):817-869

Abstract:

Departures from self-interest in economic experiments have recently inspired models of "social preferences." We design a range of simple experimental games that test these theories more directly than existing experiments. Our experiments show that subjects are more concerned with increasing social welfare-sacrificing to increase the payoffs for all recipients, especially low-payoff recipients-than with reducing differences in payoffs (as supposed in recent models). Subjects are also motivated by reciprocity: they withdraw willingness to sacrifice to achieve a fair outcome when others are themselves unwilling to sacrifice, and sometimes punish unfair behavior.