scholarly journals An Introduction to Other‑Regarding Preferences with an Application to Contract Design

2018 ◽  
pp. 17-48
Author(s):  
João Eira
Keyword(s):  
External Validity ◽  
Ultimatum Game ◽  
Scientific Evidence ◽  
Field Studies ◽  
Individual Behavior ◽  
Reasonable Assumption ◽  
Lab Experiments ◽  
The Gift ◽  
Other Regarding ◽  
Other Regarding Preferences

Economic models of individual behavior often make the assumption that in evaluating between competing alternatives agents are only concerned with how each alternative impacts their own payoffs. This simple, yet reasonable, assumption postulates that agents are self‑regarding, that is, agents are not concerned with how their decisions affect other people. This study casts doubt on this assumption. There has been a steady accumulation of experimental evidence from games such as the ultimatum game and the gift exchange game where the observed behavior is not explained by assuming that agents have self‑regarding preferences. Agents often make decisions that lower their payoffs if by doing so other agents are better off. In contrast to self‑regarding preferences, agents are said in this case to have other‑regarding preferences. Most of the evidence discussed in this study was gathered by the use of laboratory experiments. The issue of external validity of this evidence has long been a point of contention. Lab experiments are highly artificial environments that place strong constraints on individual behavior. While this imbues them with their source of methodological strength, it is also a weakness. Evidence gathered in the lab does not necessarily generalize to the real world, and lab experiments are often compared with field studies which are assumed to provideevidence that is more externally valid. We examine the question of the external validity of lab experiments and conclude they are a valid tool for gathering scientific evidence about human behavior.

In evolutionary games, enlightened self-interests are still ultimately self-interests

2007 ◽  
Vol 30 (1) ◽  
pp. 25-26 ◽  
Author(s):  
Thomas Getty
Keyword(s):  
Human Behavior ◽  
Evolutionary Theory ◽  
Evolutionary Games ◽  
Analytical Tool ◽  
Behavioral Sciences ◽  
Other Regarding ◽  
Other Regarding Preferences

Evolutionary theory provides a firm foundation for the unification of the behavioral sciences, and the beliefs, preferences, and constraints (BPC) model is a useful analytical tool for understanding human behavior. However, evolutionary theory suggests that if other-regarding preferences expressed by humans have evolved under selection, they are ultimately, if not purely, in the constrained, relative self-interests of individuals who express them.

Self-Interested Giving: The Relationship Between Conditional Gifts, Charitable Donations, and Donor Self-Interestedness

2021 ◽  
Author(s):  
Matthew Chao ◽  
Geoffrey Fisher
Keyword(s):  
Decision Analysis ◽  
Experimental Evidence ◽  
Laboratory Experiments ◽  
Self Report ◽  
Negative Effects ◽  
Charitable Donations ◽  
Prosocial Motives ◽  
The Gift ◽  
Other Regarding ◽  
The Relationship

Nonprofits regularly use conditional “thank you” gifts to entice prospective donors to give, yet experimental evidence suggests that their effects are mixed in practice. This paper uses multiple laboratory experiments to test when and why thank you gifts vary in effectiveness. First, we demonstrate that although gifts often increase donations to charities that donors did not rate highly, many of the same gifts had no effects or negative effects for charities that prospective donors already liked. We replicate these findings in a second experiment that uses a different range of charity and gift options as well as different measures of participant perceptions of a charity. We also find that making gifts optional, as is common in fundraising campaigns, does not eliminate these negative gift effects. In additional experiments, we directly test for donor motives using self-report and priming experiments. We find that thank you gifts increase (decrease) the weight that donors place on self-interested (prosocial) motives, leading to changes in donation patterns. Altogether, our results suggest that practitioners may find gifts more useful when appealing to donors not already familiar with or favorably inclined to their charity, such as during donor acquisition campaigns. They may be less useful when appealing to recent donors or others who already favor the charity, in part because the gift may activate mindsets or norms that emphasize self-interested motives instead of more prosocial, other-regarding motives. This paper was accepted by Yan Chen, decision analysis.

Going Far by Going Together: James M. Buchanan’s Economics of Shared Ethics

2021 ◽  
pp. 1-15
Author(s):  
Art Carden ◽  
Gregory W. Caskey ◽  
Zachary B. Kessler
Keyword(s):  
Business Ethics ◽  
Economic Analysis ◽  
Public Good ◽  
Public Capital ◽  
The Public ◽  
Economic Progress ◽  
The Individual ◽  
Other Regarding ◽  
Ethical Communication ◽  
Other Regarding Preferences

We explore themes in Nobel Prize–winning economist James M. Buchanan’s work and apply his Ethics and Economic Progress to problems facing individuals and firms. We focus on Buchanan’s analysis of the individual work ethic, his exhortations to “pay the preacher” of the “institutions of moral-ethical communication,” and his notion of law as “public capital.” We highlight several ways people with other-regarding preferences can contribute to social flourishing and some of the ways those who have “affected to trade for the public good” might want to redirect their efforts. We show how Buchanan’s work has considerable implications for business ethics. Just as his economic analysis of politics changed how we understand government, we think his economic analysis of ethics can (and should) change how we understand business.

scholarly journals Testing the Waters: Behavior across Participant Pools

2021 ◽  
Vol 111 (2) ◽  
pp. 687-719
Author(s):  
Erik Snowberg ◽  
Leeat Yariv
Keyword(s):  
External Validity ◽  
Large Scale ◽  
Student Population ◽  
University Student ◽  
Mechanical Turk ◽  
Amazon Mechanical Turk ◽  
Lab Experiments ◽  
The Us ◽  
Small Set ◽  
Observer Effects

We leverage a large-scale incentivized survey eliciting behaviors from (almost) an entire undergraduate university student population, a representative sample of the US population, and Amazon Mechanical Turk (MTurk) to address concerns about the external validity of experiments with student participants. Behavior in the student population offers bounds on behaviors in other populations, and correlations between behaviors are similar across samples. Furthermore, non-student samples exhibit higher levels of noise. Adding historical lab participation data, we find a small set of attributes over which lab participants differ from non-lab participants. An additional set of lab experiments shows no evidence of observer effects. (JEL C83, D90, D91)

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