More than outcomes: A cognitive dissonance-based explanation of other-regarding behavior

Recent research has cast some doubt on the general validity of outcome-based models of social preferences. We develop a model based on cognitive dissonance that focuses on the importance of self-image. An experiment (a dictator game variant) tests the model. First, we find that subjects whose choices involve two psychologically inconsistent cognitions indeed report higher levels of experienced conflict and take more time for their decisions (our proxies for cognitive dissonance). Second, we find support for the main model components. An individual’s self-image, the sensitivity to cognitive dissonance, and expected behavior of others have a positive effect on other-regarding behavior. JEL classifications: C72, C91, D03, D80