Models Of Social Preferences Research Articles

Social preferences and the variability of conditional cooperation

AbstractWe experimentally examine how incentives affect conditional cooperation (i.e., cooperating in response to cooperation and defecting in response to defection) in social dilemmas. In our first study, subjects play eight Sequential Prisoner’s Dilemma games with varying payoffs. We elicit second mover strategies and find that most second movers conditionally cooperate in some games and free ride in others. The rate of conditional cooperation is higher when the own gain from defecting is lower and when the loss imposed on the first mover by defecting is higher. This pattern is consistent with both social preference models and stochastic choice models. In a second study subjects play 64 social dilemma games, and we jointly estimate noise and social preference parameters at the individual level. Most of our subjects place significantly positive weight on others’ payoffs, supporting the underlying role of social preferences in conditional cooperation. Our results suggest that conditional cooperation is not a fixed trait but rather a symptom of the interaction between game incentives and underlying social preferences.

Social preferences in the public goods game-An Agent-Based simulation with EconSim.

Using a reinforcement-learning algorithm, we model an agent-based simulation of a public goods game with endogenous punishment institutions. We propose an outcome-based model of social preferences that determines the agent's utility, contribution, and voting behavior during the learning procedure. Comparing our simulation to experimental evidence, we find that the model can replicate human behavior and we can explain the underlying motives of this behavior. We argue that our approach can be generalized to more complex simulations of human behavior.

Morally monotonic choice in public good games

Rational choice theory, including models of social preferences, is challenged by decades of robust data from public good games. Provision of public goods, funded by lump-sum taxation, does not crowd out private provision on a one-for-one basis. Provision games elicit more of a public good than payoff-equivalent appropriation games. This paper offers a morally monotonic choice theory that incorporates observable moral reference points and is consistent with the two empirical findings. The model has idiosyncratic features that motivate a new experimental design. Data from our new experiment and three previous experiments favor moral monotonicity over alternative models including rational choice theory, prominent belief-based models of kindness, and popular reference-dependent models with loss aversion.

Bling-Bling politics: exposure to status-goods consumption shapes the social policy preferences of the less affuent

Abstract Consumer behavior and sociological research have recognized early on the negative externalities of exposure to conspicuous consumption: anxiety, debt and wasteful consumption. This article contributes to political economy by incorporating the costs of exposure to wealth-signaling consumption into the materialist self-interest model of social policy preferences. The argument is that exposure to conspicuous consumption reduces support for social spending and increases demand for lower income taxes. Tax cuts impact purchasing power directly, allowing individuals to keep up with consumption standards and to avoid looking poor by comparison. Two USA-based analyses using fine-grained data on consumption and individual attitudes at the zip code and county level support the argument. Importantly, less-affluent citizens are more likely to prioritize cuts to social spending over tax increases, at higher levels of conspicuous consumption. Additional analyses rule out alternative explanations like upward mobility prospects, local wealth effects and partisan context.

Role effect on beauty premium: Female as proposer may gain more fairness.

Beauty premium permeates every aspect of life. However, whether females' roles, as proposers or as recipients/responders, have an influence on the marginal effect of beauty remains unclear and was explored in the current study. Dictator game and ultimate game were employed to investigate the effect of females' roles on beauty premium from males. Participants played against female recipients and proposers in Study 1. Linear regression models of social preferences with respect to female attractiveness showed a strongly positive marginal effect of beauty, and the effect was significantly higher when participants played against female recipients than female proposers. Study 2 with ultimate games only was conducted for further testing the effect of strategic behavior on beauty premium. A probabilistic method was established to handle issues on comparison between participants' behaviors as proposers and as recipients/responders. The results of these studies suggest that there are significant money forgone differences between females as proposers and as recipients/responders financially regardless of the strategy-or-not decision difference. All the findings indicate that the beauty premium varies with female roles.

Clash of Norms Judicial Leniency on Defendant Birthdays

We document judicial leniency on defendant birthdays across 5 million decisions. French sentences are 1% fewer and 3% shorter. U.S. federal sentences are 33% shorter in the day component of sentences (the month component remains unaffected). New Orleans sentences are 15% shorter overall. No leniency appears on the days before or after a defendant’s birthday. Federal judges using deterrence language in opinions, are unaffected, isolating the judicial as opposed to defendant channel. The effect is doubled when judge and defendant share the same race. Our courtroom setting rules out many models of social preferences with reciprocity motives.

Stability of Peer Acceptance and Rejection and Their Effect on Academic Performance in Primary Education: A Longitudinal Research

The objectives of this study were to analyze the evolution of peer relationships and academic performance and the effect of the former on the latter in primary education, differentiating between positive and negative relationships. To this end, the likes and dislikes received by each student from his/her classmates were measured at four time points between first and sixth grades, as well as the marks given by their teachers in the subjects of mathematics and Spanish language. One-hundred-sixty-nine students (52.7% girls) from 10 classes of five public schools participated in this study. To verify the objectives, we used a complex structural equation model, obtained from a combination of two autoregressive models (AR, one for social preferences and another one for academic performance), two multi-trait multi-method models (MTMM, one for acceptances and rejections and another one for academic performance in mathematics and Spanish language), and an effects model of social preferences on academic performance. This study confirms: (a) The stability of both peer relationships and academic performance throughout childhood; (b) the stable influence of social relationships on academic performance; and (c) the importance of considering acceptance and rejection differentially. This work reveals the failure of the school to address initial disadvantages, and it provides guidelines for early and inclusive interventions.

Like Me, You Say? a Model and Experiment on Supporting In-Group Bias through Cheaptalk

This paper presents a simple application and experimental test of a theoretical model of discriminatory social preferences. First, it establishes conditions under which a specification of “defection aversion” can support an equilibrium in which costless messages engender cooperative strategies in a one-shot Prisoners’ Dilemma (PD) game. The main result is a signaling equilibrium with full separation of signals, and cooperation whenever the social distance is less than a certain threshold level. The second part of the paper is an experimental application and test of a discrete version of the theory. Using the minimal group paradigm, subjects are put into a set of interlocking groups. 116 subjects played 4 games each (within-subjects) under different informational (treatment) contexts. Results are broadly consistent with the theory: people cooperate more when faced with group members. They are also less “honest” with their messages when messages are sequential than when they are simultaneous, which suggests a strategic motivation to the messages. A somewhat unexpected empirical result shows that the threshold social distance supporting cooperation is lower when the group information is based on simultaneous cheap talk than when it is exogenously revealed. Noting that the empirical rates of honest messaging are also rather far from the 100% predicted by the model, a theoretical extension shows that smaller social neighborhoods are in fact a straightforward prediction when the truth of messages is uncertain.

Reciprocity in Smith

This paper aims at providing a reconstruction of a general theory of reciprocity from Smith’s works which provides both a descriptive and a normative account of reciprocity, and explains reciprocal behavior in bilateral relationships as well as the origin and evolution of social rules of reciprocity. I will show that this “Smithian” theory of reciprocity can explain several experimental results, generate previsions for new experiments and offer an interesting alternative to existing models of reciprocity and social preferences in economics. Smith offers a non-utilitarian, emotion-based and moral theory of reciprocity. We conclude in underlining how the idea of reciprocity is at the heart of Smith’s theory of morality and of his moral egalitarianism.

Stable distribution of reciprocity motives in a population

Evolutionary models show that human cooperation can arise through direct reciprocity relationships. However, it remains unclear which psychological mechanisms proximally motivate individuals to reciprocate. Recent evidence suggests that the psychological motives for choosing to reciprocate trust differ between individuals, which raises the question whether these differences have a stable distribution in a population or are rather an artifact of the experimental task. Here, we combine data from three independent trust game studies to find that the relative prevalence of different reciprocity motives is highly stable across participant samples. Furthermore, the distribution of motives is relatively unaffected by changes to the salient features of the experimental paradigm. Finally, the motive classification assigned by our computational modeling analysis corresponds to the participants’ own subjective experience of their psychological decision process, and no existing models of social preference can account for the observed individual differences in reciprocity motives. These findings support the view that reciprocal decision-making is not just regulated by individual differences in 'pro-social’ versus ‘pro-self’ tendencies, but also by trait-like differences across several alternative pro-social motives, whose distribution in a population is stable.

Value for money? Vote-buying and politician accountability

The prevalence of vote-buying is widely identified as a cause of poor governance in the developing world; potential mechanisms for this relationship include the selection of lower quality politicians, and the reduced accountability experienced by politicians once elected. In this paper, we present the first experimental evidence in support of the second channel of reduced accountability. Using data from laboratory experiments conducted in the U.S. and Kenya, we find that vote payments reduce voters' willingness to hold politicians accountable: holding fixed politician identity, voters who receive payments are less willing to punish the politician for rent-seeking, and this reduction in punishment is larger in magnitude when payments are widely targeted. Unsurprisingly, the politician then engages in a higher level of rent-seeking. A simple model of multi-faceted social preferences encompassing reciprocity and inequality aversion is consistent with these findings.

Direct Tests of Models of Social Preferences and a New Model

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.

Trust, Fear, Reciprocity, and Altruism: Theory and Experiment

This paper describes central topics in our research program on social preferences. The discussion covers experimental designs that discriminate among alternative components of preferences such as unconditional altruism, positive reciprocity, trust (in positive reciprocity), negative reciprocity, and fear (of negative reciprocity). The paper describes experimental data on effects of social distance and decision context on reciprocal behavior and male vs. female and group vs. individual differences in reciprocity. The exposition includes experimental designs that provide direct tests of alternative models of social preferences and summarizes implications of data for the models. The discussion reviews models of other-regarding preferences that are and are not conditional on othersA¢?? revealed intentions and the implications of data for these models.

Co-production or DIY: an analytical model of consumer choice and social preferences

PurposeThe purpose of this paper is to demonstrate how consumers choose among three different options offered by a firm in a monopolistic setting, namely, to buy a standard product with a non-customizable design, to ask the firm to customize a product using the consumer’s ideal design or to do the entire design task by themselves. The authors also investigate how social preference intensity and the possibility of reselling a product influence a consumer’s decision.Design/methodology/approachThe authors develop an analytical (game theoretical) consumer choice framework and incorporate a psychological factor into the model. The authors also empirically validate the analytical findings using simulations.FindingsThe authors find that as social preference intensity increases, the number of co-producers can either decrease or increase. The authors offer a closed-form solution and interval graphs showing that when the setup price is large (small), the proportion of the market that chooses to do-it-yourself (DIY) is large (small) and an increase in social preference intensity leads to a decrease (increase) in co-production.Originality/valueThis is the first paper to incorporate a social factor into an economic model in a consumer behavior setting. It is also the first paper to explain how customers’ preferences among possible options, such as DIY (without the firm’s help), co-production (with the firm’s help) and a standard product might change while considering other people’s preferences, as well as given associated costs.

Revealed preferences in a sequential prisoners’ dilemma: A horse-race between six utility functions

We experimentally investigate behavior and beliefs in a sequential prisoner’s dilemma. Each subject had to choose an action as first mover and a conditional action as second mover. All subjects also had to state their beliefs about others’ second-mover choices. Using these elicited beliefs, we apply the transparent Selten–Krischker approach to compare the explanatory power of a few current models of social and moral preferences. We find clear differences in explanatory power between the preference models, both without and with control for the number of free parameters. The best-performing models explain about 80% of the observed behavior. We compare our results with those obtained from a conventional maximum-likelihood approach, and find that the results by and large agree. We also present a structural model of belief formation. We find a consensus bias—whereby subjects believe others behave like themselves—and payoff-salience driven optimism—whereby subjects overestimate the probabilities for favorable outcomes.

Revealed Preferences in a Sequential Prisoners' Dilemma: A Horse-Race between Six Utility Functions

We experimentally investigate behavior and beliefs in a sequential prisoner’s dilemma. Each subject had to choose an action as first mover and a conditional action as second mover. All subjects also had to state their beliefs about others’ second-mover choices. Using these elicited beliefs, we apply the transparent Selten-Krischker approach to compare the explanatory power of a few current models of social and moral preferences. We find clear differences in explanatory power between the preference models, both without and with control for the number of free parameters. The best-performing models explain about 80% of the observed behavior. We compare our results with those obtained from a conventional maximum-likelihood approach, and find that the results by and large agree. We also present a structural model of belief formation. We find a consensus bias–whereby subjects believe others behave like themselves–and payoff-salience driven optimism –whereby subjects overestimate the probabilities for favorable outcomes.

Managerial bonuses and subordinate mistreatment

Can performance bonuses increase the likelihood that managers coerce their subordinates into exerting high levels of effort when doing so promotes neither efficiency nor equity? We consider a laboratory setting in which managers compete to obtain a large bonus at the end of the experiment and the probability of obtaining it depends partly on the effort exerted by the subordinates. We find that managers are more than twice as likely to punish subordinates exerting “fair” levels of effort if they compete for individual bonuses than when there are no bonuses. This is not the case when they compete for pooled bonuses – giving managers discretionary power over how to share them with their subordinates – as most subordinates willingly exert maximal effort. A model in which individuals are assumed to care about equity captures subordinates’ behavior well. Managers’ willingness to coerce subordinates into exerting unfairly high levels of effort, on the other hand, cannot be readily accounted for by any of the existing models of social preferences.

Communication and voting in heterogeneous committees: An experimental study

We study experimentally the drivers of behavior in committees featuring publicly known diverse preference who engage in voting preceded by one shot cheap talk communication. On the aggregate, we find low lying levels and different preference types using decision rules biased towards the majority heuristic which consists in following the majority of announced signals. Our results are inconsistent with the predictions derived from the standard model as well as models of social preferences and homogeneous naive behavior. Results are instead consistent with the predictions of a model of cognitive heterogeneity, in which a large majority of unsophisticated subjects truth-tells and uses the majority decision heuristic, while a minority of sophisticated agents lies strategically and applies its payoff-maximizing decision rule, albeit with noise.

Interpersonal risk assessment and social preferences: An experimental study

Abstract We investigate interpersonal risk assessment, that is how individuals use either their own or their partner’s monetary resources to offset the risk that affects them or their partner. The observed behavior is in line with the predictions of a simple piecewise linear model of social preferences. Overall, individuals opportunistically draw from others’ resources to offset risk; furthermore, they display higher levels of risk aversion when delegated to choose for others rather than when choosing for themselves. However, different social types differ in the assessment of interpersonal risk. Considering our results, we suggest that studies dealing with interpersonal risk assessment should not only focus on risk preferences, but also take into account social preferences.

A cognitive model of social preferences in group interactions

Modeling the interactions in groups is becoming increasingly important in many application domains such as the design of interactive systems and social robots. Since human interactants do not always make rational choices, a good model of their social motivations is needed to explain the strategies of the interactants that are often influenced by social factors and preferences, the feeling of fairness and understanding the need for cooperation. We propose a cognitive model of social preferences of three or more interactants that are engaged in a collaborative game. The game strategies of the interactants are modeled with cooperation ratios and utility functions. We developed a new generalized utility-based approach to model the cooperation and fairness in multiplayer interactions, which uses three utility parameters. In two-person games, as it has been investigated by others, it is impossible to distinguish between fairness and cooperation in the decisions of a given player. We show that in n-person games (n> 2), and with the use of the proposed utility-based approach, it is possible to distinguish between fairness and cooperation. This makes the proposed approach suitable for more detailed analysis of group interactions in a game setting, which can better explain the social motivation of the interactants, than existing utility models and models that utilize on cooperation ratios. We show that the proposed generalization makes the newly proposed utility function less sensitive to the payoffs of one player if the size of the group grows, and test it with data from the MARS-500 isolation experiment.