Working Paper: NBER ID: w22234
Authors: James C. Cox; John A. List; Michael Price; Vjollca Sadiraj; Anya Samek
Abstract: The literature exploring other regarding behavior sheds important light on interesting social phenomena, yet less attention has been given to how the received results speak to foundational assumptions within economics. Our study synthesizes the empirical evidence, showing that recent work challenges convex preference theory but is largely consistent with rational choice theory. Guided by this understanding, we design a new, more demanding test of a central tenet of economics—the contraction axiom—within a sharing framework. Making use of more than 325 dictators participating in a series of allocation games, we show that sharing choices violate the contraction axiom. We advance a new theory that augments standard models with moral reference points to explain our experimental data. Our theory also organizes the broader sharing patterns in the received literature.
Keywords: moral costs; rational choice theory; experimental evidence; dictator game; social preferences
JEL Codes: C9; C93; D01; D03
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| variations in feasible sets (C62) | sharing choices (D16) |
| initial endowments (D63) | sharing choices (D16) |
| removing taking options (Y60) | higher payoffs to recipients (J33) |
| removing taking options (Y60) | less kept for themselves (D14) |
| moral reference points (A13) | sharing behavior (D16) |
| moral costs (A13) | decision-making process (D70) |