Estimating Social Preferences Using Stated Satisfaction: Novel Support for Inequity Aversion

In this paper, we use stated satisfaction to estimate social preferences: subjects report their with payment-profiles that hold own payment constant while varying another subject's payment. This approach yields significant support for the inequity aversion model of Fehr and Schmidt (1999). is among most renowned in behavioral economics, positing a generalized inequality stronger when one's payoff lower–rather than higher–than others'; i.e., envy guilt. While aggregate-level estimates based on revealed preferences laboratory games have supported model, assumption guilt often violated at individual level. paradox may be due limitations revealed-preference approach. An advantage avoiding eliciting relatively easy implement less prone being confounded motives like reciprocity; also absence tradeoffs between others' payoffs cognitively demanding subjects. Our unstructured does not limit expression aversion, yet our methodology it. At level, 86% exhibit least as strong guilt, 76% (65%) weakly (strongly) adhere model. individual-level are robust changing value range other payments. Methodologically, can an easy-to-implement complement choice-based preference-measures contexts interest economists.