Riyanto, Yohanes Eko and Zhang, Jianlin (2010): An Egalitarian Regime Breeds Generosity: The Effect of Endowment Allocation Procedures on Social Preferences.
Download (419kB) | Preview
We experimentally investigate the effect of endowment allocation procedures on social preferences using a two-stage dictator game. In the first stage, participants who were randomly selected as allocators had to perform a task in order to earn money. Better performance on the task resulted in higher earnings. In our baseline meritocratic treatment, the allocators' initial endowment was set equal to their individual earnings. We compared this with an egalitarian treatment whereby the allocators' initial endowment was set equal to the average earnings of all allocators. Essentially, high performers were taxed and under performers were subsidized by the high performers. In the second stage, the allocators had to divide their endowment with the recipients. We show that the allocators were more generous in the egalitarian treatment than in the meritocratic treatment. Interestingly, being taxed did not reduce the high performers' generosity but being subsidized did significantly increase the under performers' generosity. Thus, being treated kindly induced the under performers to reciprocate forward to other people.
|Item Type:||MPRA Paper|
|Original Title:||An Egalitarian Regime Breeds Generosity: The Effect of Endowment Allocation Procedures on Social Preferences|
|Keywords:||Other-regarding Behavior; Dictator Game; Endowment Allocation Procedures; Meritocratic; Egalitarian; Forward Reciprocity|
|Subjects:||D - Microeconomics > D6 - Welfare Economics > D63 - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
D - Microeconomics > D6 - Welfare Economics > D64 - Altruism ; Philanthropy
C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C91 - Laboratory, Individual Behavior
|Depositing User:||Yohanes Eko Riyanto|
|Date Deposited:||29. Mar 2010 08:17|
|Last Modified:||30. Dec 2015 12:07|
Bolton, Gary and Axel Ockenfels. 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, 90(1): 166-193.
Boulding, Kenneth. (1981). The Economy of Love and Fear; A Preface to Grants Economics, Belmont-California , Wadsworth Pubblishing Company.
Colin Camerer. 2003. Behavioral Game Theory: Experiments in Strategic Interaction, New Jersey, Princeton University Press.
Cappelen, Alexander, Astrid D. Hole, Erik Ø. Sørensen, and Bertil Tungodden. 2007. "The Pluralism of Fairness Ideals: An Experimental Approach," American Economic Review, Vol. 97(3): 818-827.
Cherry, Todd, Peter Frykblom, and Jason Shogren. 2002. "Hardnose the Dictator," American Economic Review, Vol. 92(4): 1218-1221.
Fehr, Ernst and Klaus Schmidt. 1999. "A Theory of Fairness, Competition, and Competition," Quarterly Journal of Economics, 114(3): 769-816.
Fehr, Ernst and Klaus Schmidt. 2003. "Theories of Fairness and Reciprocity - Evidence and Economic Applications", in: Dewatripont, M. et.al., Advances in Economics and Econometrics, Eighth World Congress of the Econometric Society, Vol.1, Cambridge: Cambridge University Press: 208-257.
Forsythe, Robert, Joel Horowitz, N. E. Savin, and Martin Sefton. 1994. "Fairness in Simple Bargaining Games," Games and Economic Behavior, Vol. 6(2): 347-369.
Konow, James. 2000. "Fair Shares: Accountability and Cognitive Dissonance in Allocation Decisions," American Economic Review, 90(4): 1072-1091.
List, John. 2007. "On the Interpretation of Giving in Dictator Games," Journal of Political Economy, 115(3): 482-493.
List, John and Todd Cherry. 2008. "Examining the Role of Fairness in Allocation Decisions," Journal of Economic Behavior and Organization, 65(1): 1-8.
Moody, Michael. 2008. "Serial Reciprocity: A Preliminary Statement," Sociological Theory, 26(2): 130-151.
Rabin, Matthew. 1993. "Incorporating Fairness into Game Theory and Economics," American Economic Review, 83(5): 1281-1302.