How Did the Great Recession Impact Social Preferences?∗

We compare behavior in modified dictators game during the “Great Recession” to behavior in otherwise identical experiments conducted amidst the economic boom that preceded it. The experiments capture both differences in indexical selfishness and differences in equalityefficiency tradeoffs. Subjects exposed to the recession exhibit higher levels of indexical selfishness and greater emphasis on efficiency relative to equality. Reproducing recessionary conditions inside the laboratory by confronting subjects with negative payoffs relative to initial endowments intensifies selfishness and increases the willingness to trade equality for efficiency, though the impact is modest relative to that of the real-world economic downturn. JEL Classification Numbers: C79, C91, D64. ∗Previously circulated as “How Does the Real World Impact Laboratory Experiments Measuring Social Preferences? Evidence from the Great Recession.” We thank UC Berkeley Office of Planning and Analysis, Financial Aid and Scholarships Office, and Cal Answers (Student Data Warehouse) for providing administrative and survey data on our subject pool and the UC Berkeley student body. We are particularly grateful to Daniel Markovits for many thoughtful comments. We also thank James Andreoni, Colin Camerer, Syngjoo Choi, Stefano DellaVigna, John List, Ulrike Malmendier, and Matthew Rabin for helpful discussions and comments. This paper has also benefited from suggestions by the participants of seminars at several universities and conferences. †Fisman: Columbia University (email: [email protected]); Jakiela: University of Maryland (email: [email protected]); Kariv: University of California, Berkeley (email: [email protected]).