Distinguishing Social Preferences from Preferences for Altruism∗

We report a laboratory experiment that enables us to distinguish preferences for altruism (concerning tradeoffs between own payoffs and the payoffs of others) from social preferences (concerning tradeoffs between the payoffs of others). By using graphical representations of three-person Dictator Games that vary the relative prices of giving, we generate a very rich data set well-suited to studying behavior at the level of the individual subject. We attempt to recover subjects’ underlying preferences by estimating a constant elasticity of substitution (CES) model that represents altruistic and social preferences. ∗This research was supported by the Experimental Social Science Laboratory (X-Lab) at the University of California, Berkeley. We are grateful to Jim Andreoni, Colin Camerer, Gary Charness, Ken Chay, Syngjoo Choi, Liran Einav, Douglas Gale, Thomas Palfrey, Ben Polak, and Tim Salmon for helpful discussions. This paper has also benefited from suggestions by the participants of seminars at Berkeley, NYU, Yale and UCSD. Syngjoo Choi provided excellent research assistance. We would also like to thank Brenda Naputi and Lawrence Sweet from the X-Lab for their valuable assistance, and Roi Zemmer for writing the experimental computer program. For financial support, Fisman thanks the Columbia University Graduate School of Business; Kariv acknowledges University of California, Berkeley; Markovits thanks Yale Law School and Deans Anthony Kronman and Harold Koh. Kariv is grateful to the hospitality of the School of Social Science in the Institute for Advances Studies. †Graduate School of Business, Columbia University, Uris 823, New York, NY 10027 (E-mail: [email protected], URL: http://www-1.gsb.columbia.edu/faculty/rfisman/). ‡Department of Economics, University of California, Berkeley, 549 Evans Hall # 3880, Berkeley, CA 94720 (E-mail: [email protected], URL: http://socrates.berkeley.edu/~kariv/). §Yale Law School, P.O. Box 208215, New Haven, CT 06520 (E-mail: [email protected], URL: http://www.law.yale.edu/outside/html/faculty/ntuser93/profile.htm).