Departures from pure self interest in economic experiments have recently inspired models of "social preferences". We conduct experiments on simple two-person and three-person games with binary choices that test these theories more directly than the array of games conventionally considered. Our experiments show strong support for the prevalence of "quasi-maximin" preferences: People sacrifice to increase the payoffs for all recipients, but especially for the lowest-payoff recipients. People are also motivated by reciprocity: While people are reluctant to sacrifice to reciprocate good or bad behavior beyond what they would sacrifice for neutral parties, they withdraw willingness to sacrifice to achieve a fair outcome when others are themselves unwilling to sacrifice. Some participants are averse to getting different payoffs than others, but based on our experiments and reinterpretation of previous experiments we argue that behavior that has been presented as "difference aversion" in re...

Many prior studies have identified that subjects in experiments demonstrate preferences for fair allocations. We present an experimental study designed to test whether a similar concern for fairness manifests itself when the decision maker is choosing among differing probabilistic allocation mechanisms that will all generate an ex post unfair allocation by assigning an indivisible prize to one individual. This investigation is inspired by Karni and Safra (2002) in which a structure for preferences for fairness in such an environment was developed. Here we use this model to design experiments that allow us to test for the presence of concern for fairness in individual choice behavior and examine some factors that may affect the intensity of the concern for fairness. 1

o ff maximizatio n. In o ther games, behavio r co nfo rms Co rrespo ndence: Bo lto n: 310 Beam, Penn State University, University Park, PA 16802, USA; geb3@psu.edu. Ockenfels: Max Planck Institute fo r Research into Eco no mic Systems, Strategic Interactio n Unit, Kahlaische Str. 10, D-07745 Jena, Germany;o ckenfels@mpiew-jena.mpg.de. - 2 - nearly perfectly to selfish payo ff maximizatio n, even tho ugh the co rrespo ndingo utco mes are far fro m egalitarian. Hence games with mo re than two players challengeo ur understandingo f the two - player games. In the next sectio n, we describe a classo f preferences that characterize 'self-centered fairness'. In sectio n 3, weo utline ho w these preferences can reco ncile seemingly inco mpatible behavio r fro m selected games. Except fo r the numbero f players, allo f these games are clo sely related to either the two-perso n ultimatumo r dictato r game. 2. Sketch of ERC preferences 'ERC' is sho rt fo r equity, recipro city and co mpeti

In the past, gift-giving has interested mainly anthropologists because it was taken to be a primitive mode of exchange. Recent contributions of economists acknowledge however that gift-giving is still present in modern exchange economies. In this paper gifts are characterized by motivations. Two main features of gift giving are to be explained: (in-)adequacy and (non-)reciprocity. It is argued that social approval is potentially a powerful explanation of giftgiving. We relate the results to the market economy and try to explain the anomaly that gift-giving is sometimes reduced after compensation is o¤ered.

Abstract: Departures from pure self-interest in economic experiments have recently inspired models of “social preferences”. We conduct experiments on simple games that test these theories more directly than the array of games conventionally considered. Our experiments show support for the prevalence of “quasi-maximin ” preferences: People are self interested, but also sacrifice to increase the payoffs for all recipients, especially low-payoff recipients. We show that quasimaximin preferences better capture behavior than recently proposed models that posit an aversion to differences in payoffs. People are also motivated by reciprocity: While there is little evidence of sacrifice to reciprocate good behavior beyond what they would sacrifice for neutral parties, they withdraw willingness to sacrifice to achieve a fair outcome when others are themselves unwilling to sacrifice, and sometimes punish unfair behavior. We propose some simple models based on our

This paper describes a sequenceo f fo ur experiments. The hypo theses tested are all info rmed byo neo r mo reo f the afo rementio ned typeso f mo dels. Each experiment buildso n the findingso f the previo us experiment in the sequence. At the same time, each experiment invo lves a different game, thereby allo wing us to study the pheno meno n fro m a varietyo f perspectives. While so meo f the mo dels we examine get impo rtant featureso f the data co rrect, no ne is co mpletely satisfacto ry. What emerges fro m this sequenceo f experiments is a seto f empirical regularities that sho uld pro vide so me useful guidance to the co nstructio no f mo re accurate mo dels. 2. Bolton and Zwick (1995): Repu tation bu ilding versu s self-centered fairness in an u ltimatu m game At first blush, strategic reputatio n building might no t seem to apply to mucho f theo therregarding behavio r weo bserve in the lab, the reaso n being that lab games are typically played amo ng ano nymo us subjects interacting fo r a single playo f the game. Under such co nditio ns, there is little chance fo r a subject to build a reputatio n witho ther subjects. Buto n reflectio n,o ne might co njecture that lab subjects act to build reputatio ns with the perso n who do es usually o bserve their actio ns: the experimenter. So fo r example, subjects might reject a small shareo f the payo ff to avo id lo o king greedy and unprincipled in the eyeso f the experimenter; by rejecting, the subject establishes a reputatio n with the experimenter that might be pro fitable to the subject in the future

We experimentally test competing theories of three-player majoritarian bargaining models with fixed, known reservation values. Subjects are randomly assigned to three roles: a proposer and two types of voters. Each role is randomly assigned a reservation value, i.e. a given amount of money he/she will receive if the proposal is rejected. These values are known to all players. Proposers then can make a take-it-or-leave-it offer on how to split a fixed, known amount of money among the players. If a majority of players accepts the proposal, the players ’ payoffs are determined by the proposal; if the proposal is rejected, each player receives his or her reservation value. We assess the ability of three behavioral hypotheses – selfish-subgame perfect, egalitarian, and “fair ” (inequality averse) behavior – to account for our results. Our primary design variable is the proposer’s reservation value, which allows us to obtain different implications from each hypothesis. We find that each hypothesis is inconsistent with our data in important respects. In particular, subjects strongly respond to changes in reservation values as if In 1978 Romer and Rosenthal published an alternative to Black’s median voter theory for