Social preferences and public economics: Mechanism design when social preferences depend on incentives

Social Preferences and Public Economics: Mechanism design when social preferences depend on incentives

Social preferences such as altruism, reciprocity, intrinsic motivation and a desire to uphold ethical norms are essential to good government, often facilitating socially desirable allocations that would be unattainable by incentives that appeal solely to self-interest. But experimental and other evidence indicates that conventional economic incentives and social preferences may be either comple...

Social Preferences in Experimental Economics

Economic incentives and social preferences: Causal evidence of non-separability

This paper investigates the hypothesis that the objective function of economic agents is non-separable in economic incentives and social preferences. We study fixed-prize contests in a 2 × 2 experimental design, varying orthogonally the degree of competition of the incentive mechanism (all-pay auction vs. lottery) and the presence or absence of social returns to bidding (public good vs. rent se...

Social Preferences

This paper surveys the theories of social preferences. Social preferences are based on that people not only care about their own well-being, but they have a certain concern with payo¤s and/or actions of others. We classify two approaches: distributional and intention-based models, and later discuss models that combine both theories. In order to provide a better illustration of the discussed mod...

Social Preferences and Competition

There is a general presumption that social preferences can be ignored if markets are competitive. Market experiments (Smith 1962) and recent theoretical results (Dufwenberg et al. 2008) suggest that competition forces people to behave as if they were purely selfinterested. We qualify this view. Social preferences are irrelevant if and only if two conditions are met: separability of preferences ...