Working Paper: NBER ID: w12041
Authors: Edward Lazear; Ulrike Malmendier; Roberto Weber
Abstract: What impact do social preferences have in market-type settings where individuals can sort in response to relative prices? We show that sorting behavior can distinguish between individuals who like to share and those who share but prefer to avoid the sharing environment altogether. In four laboratory experiments, prices and social preferences interact to determine the composition of sharing environments: Costless sorting reduces the number of sharers, even after inducing positive reciprocity. Subsidized sharing increases entry, but mainly by the least generous sharers. Costly sharing reduces entry, but attracts those who share generously. We discuss implications for real-world giving with sorting.
Keywords: social preferences; sorting; charitable giving; dictator game; reciprocity
JEL Codes: B41; C90; D64
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| sorting behavior (C69) | composition of sharing environments (D16) |
| costless sorting (D61) | number of sharers (D16) |
| costless sorting (D61) | average amount shared (D33) |
| subsidized sharing (D16) | entry (Y20) |
| subsidized sharing (D16) | average amount shared among entrants (D33) |
| costly sharing (D16) | entry of nonsharers and reluctant sharers (D16) |
| costly sharing (D16) | willing sharers (D16) |
| positive reciprocity (D64) | sharing (D16) |
| positive reciprocity (D64) | reluctance to share (D16) |