Combining Basic Income and Social Preferences: A Theoretical Basis for Laboratory Experiments

Individual differences have been addressed by many authors in social sciences, however personality has been neglected. The purpose of this thesis is to investigate the role of personality in social decision-making situations. Prior researches on the role of personality either focused on how personality influences social and economic preferences or on the link between personality and influence in social decision-making. The present thesis intends to combine these two aspects with the help of a secondary analysis of a bargaining experiment. To test personality, the Five Factor Model was included and social preferences were measured with the help of social value orientation. The findings show that two personality dimensions (Agreeableness and Conscientiousness) indicate social preferences and four personality dimensions (Agreeableness, Extraversion, Neuroticism, and Conscientiousness) influence the ability to use structural power. Furthermore, it has been found that the link of personality and bargaining behavior is moderated by social preferences. The findings of the present thesis provide various theoretical and empirical implications for personality psychology, human resource management, and organizational behavior. Keywords: Social decision-making; fairness; personality; Five Factor Model; social value orientation.

Social preferences like social value orientation are considered a promising solution to social dilemmas, such as mitigating anthropogenic climate change. However, evidence on the relationship between social preferences and environmental concerns is mixed, possibly because these constructs have commonly been measured by distinct methods that do not facilitate direct comparisons. We address this gap by introducing an incentivized preference-based measurement approach, extending a subject’s concerns for the wellbeing of others to a subject’s willingness to support environmental and humanitarian endeavors, based on a simple social preferences utility function. In this measurement approach, subjects make resource allocation choices with real consequences and the design ensures comparability of different revealed preferences (i.e., people’s willingness to make tradeoffs between themselves and others via donations to NGOs supporting different environmental and social causes). We then use this measurement method in an exploratory fashion to consistently assess preferences for environmental and humanitarian concerns in a laboratory experiment. We find that social and environmental value orientations are robustly interrelated, and further that people are generally more willing to pay to benefit people in need, compared to abstract environmental causes. We conclude that interventions to nudge people towards proenvironmental behavior will have a greater impact if human suffering resulting from global climate change is made more salient.

Social Preferences and Social Curiosity

Social Preferences and Social Curiosity

Environmental policy design has much to gain from a better understanding of existing voluntary behaviour and motivations. In laboratory experiments, participants often exhibit social preferences such as altruism, spite, reciprocity and notions of fairness. In contrast, traditional neoclassical theory assumes that people act rationally in a way that maximises their self-interest. In environmental markets, social preferences and self-interest interact. We apply experimental economics to test the hypothesis that social preferences are not maintained in the presence of a competitive market institution. In the initial public goods game, many participants were prepared to make costly voluntary contributions. However the introduction of the market institution triggered a ‘market instinct’ in experimental participants. They abandoned the social preferences they were previously expressing and became self-interested profit maximisers. This self-interested behaviour persisted even after the market institution was discontinued. These findings are important to understanding the role and impact of markets for environmental policy.

Employee types and endogenous organizational design: An experiment

Population Uncertainty in Voluntary Contributions of Public Goods

Religion and social preferences: An experimental study

Social preferences and voting: An exploration using a novel preference revealing mechanism

Beyond a summary of the paper, this review of “Group Identity and Social Preferences” by Yan Chen and Sherry X. Li highlights its exceptional impact on our understanding of group-contingent social preferences. This paper has made an important theoretical contribution by introducing group identity in the Charness and Rabin model of social preferences. The core of the contribution is to show experimentally that social identity influences distributional preferences, reciprocity, and welfare-maximizing behavior. In particular, charity increases and envy decreases when people are matched with an in-group compared to an out-group, and people are more likely to reward and less likely to punish an in-group than an out-group match. This paper has also contributed to methodological debates about the use of minimal group identity in laboratory experiments. It has inspired many research programs on the role of group-contingent preferences in various dimensions of decision-making in society. It is also important to emphasize its policy implications regarding how group-contingent social preferences could be activated to improve efficiency and the quality of social interactions in our segmented societies. This research agenda is more relevant than ever.

Is There Selection Bias in Laboratory Experiments? The Case of Social and Risk Preferences

The hold-up problem plays an important role in the study of corporate boundaries and is also an important factor in the study of economics in organizations. It not only causes underinvestment, but also leads to the loss of corporate earnings and social welfare. The hold-up problem has been a hot topic for scholars since its introduction. However, most of the scholars' studies are based on the assumption of rational economic man and do not consider the factor of human beings' social preferences. In recent years, the development of behavioral experimental research methods has changed this situation. Many scholars have demonstrated that people's behavior deviates from the assumption of rational economic man because they have different social preferences. Therefore, this paper introduces a frontier theoretical perspective in the game study of the hold-up problem. Based on social identity theory, and speculates that group identity enhances the altruistic preference of individuals toward group members, and combines behavioral experiments with controlled laboratory experiments to obtain experimental data. The experimental results also support our speculation and provide an individual experimental basis for the theoretical study of the hold-up problem, which will help alleviate the hold-up problem in the future.

The role of the market in mitigating and mediating various forms of behavior is perhaps the central issue facing behavioral economics today. This study designs a field experiment that is explicitly linked to a controlled laboratory experiment to examine whether, and to what extent, social preferences influence outcomes in actual market transactions. While agents drawn from a wellfunctioning marketplace behave in accord with social preference models in tightly controlled laboratory experiments, when observed in their naturally occurring settings their behavior approaches what is predicted by self-interest theory. In the limit, much of the observed behavior in the marketplace that is consistent with social preferences is due to reputational concerns: suppliers who expect to have future interactions with buyers provide higher product quality only when the buyer can verify quality via a third-party certifier. The data also speak to theories of how reputation effects enhance market performance. In particular, reputation and the monitoring of quality are found to be complements, and findings suggest that the private market can solve the lemons problem through third party verification.

The role of the market in mitigating and mediating various forms of behavior is perhaps the central issue facing behavioral economics today. This study designs a field experiment that is explicitly linked to a controlled laboratory experiment to examine whether, and to what extent, social preferences influence outcomes in actual market transactions. While agents drawn from a well-functioning marketplace behave in accord with social preference models in tightly controlled laboratory experiments, when they are observed in their naturally occurring settings, their behavior approaches what is predicted by selfinterest theory. In the limit, much of the observed behavior in the marketplace that is consistent with social preferences is due to reputational concerns: suppliers who expect to have future interactions with buyers provide higher product quality only when the buyer can verify quality via a third-party certifier. The data also speak to theories of how reputation effects enhance market performance. In particular, reputation and the monitoring of quality are found to be complements, and findings suggest that the private market can solve the lemons problem through third-party verification.

The field of behavioral economics enhances the ability of social science research to effectively inform socially efficient climate policy at the microeconomic level, in part due to the dependence of climate outcomes upon present and future human consumption patterns. Since the behavioral field is relatively new, environmental and resource economists still have scarce evidence as to why people make particular decisions. For this thesis, I have conducted both field and laboratory experiments to address market failures highly relevant to environmental outcomes, namely international public goods problems and externalities from fuel and resource consumption. My methodology capitalizes upon the benefits of each experimental methodology—laboratory, artefactual, framed, and natural—to capture the effects of particular informational and contextual elements on subsequent behavior. While each methodology has its potential advantages and shortcomings, I contend that the complete toolkit is necessary to study a broad range of relevant environmental contexts. For instance, while natural field experiments are generally considered the “gold standard” in terms of exogeneity and generalizability, many settings in which field experimentation may provide tremendous insight preclude randomization across unknowing subjects. Similarly, researchers may not have access to populations of interest, though lab experimentation may still provide insights into the behavior of these populations or reveal motivations not yet captured in neoclassical utility functions. In this thesis, I will detail results from one of each experimental type, each suited to the context of interest. The natural field experiment in Chapter 2 aims to discern whether there is a role for environmental preferences and cognitive dissonance to play in encouraging individuals to engage in resource-conserving behaviors, and suggests that the latter may be effective in changing the behavior of green consumers. Chapter 3 presents the results of a large-scale framed field experiment comprising all eligible captains in Virgin Atlantic Airways, which tested the impacts of personalized information, tailored targets, and prosocial incentives on captains’ performance of fuel-efficient behaviors. In addition to documenting a substantial Hawthorne effect, we provide intent-to-treat estimates of the three types of feedback to show that tailored targets are the most (cost) effective strategy of those implemented. I introduce a complementary artefactual field experiment in Chapter 4, which allows for detailed scrutiny of captains’ fuel efficiency based on their social preferences as well as preferences and attitudes toward risk and uncertainty. I find that more risk-averse captains are more prone to over-fuel, that prosocial incentives increase captains’ well-being, and that revealed altruism increases responsiveness to prosocial incentives. Finally, Chapter 5 aims to provide insight into the effects of “side deals” in facilitating cooperation on international climate agreements. Using a lab experiment, we find that side deals alter the composition of group contribution to climate change mitigation, eliciting increased effort on the part of players with higher wealth.