Who Gains from Competition? The Ultimatum Game in a Labor-Market Setting in Ghana

Who benefits from introducing competition in the setting of an ultimatum game? We introduce a multiplayer version of the ultimatum game to subjects in Accra, Ghana, framed in a labour market setting. In this version three Proposers (employers) can make offers to three Responders (workers) at the same time. Subjects also participate in a treatment without competition. In this treatment one Proposer faces one Responder, just as in the classical ultimatum game. Even though in the competition treatment the number of Responders and Proposers is equal, we find some evidence that the amounts proposed increase in the treatment with competition. A potential explanation for this are bidding effects, where Proposers bid offensively for the Responders with lower reservation payoffs, to increase their chances of having this Responder accept their offer. This bidding increases the amounts that Proposers propose to give to the Responders. This is in particular beneficial to the Responders, who now capture a larger share of the surplus.

Social Preferences, Public Policy, and Gender

In most laboratory experiments concerning prosocial behavior subjects are fully informed how their decision influences the payoff of other players. Outside the laboratory, for instance when voting for a policy reform proposal, individuals typically have to decide without such detailed knowledge. To assess the effect of information asymmetries on prosocial behavior, we conduct a laboratory experiment with a simple non-strategic interaction. A dictator has only limited knowledge about the benefits his prosocial action generates for a recipient. We observe subjects with heterogenous social preferences, in particular inequalityaverse and efficiency-concerned individuals. While under symmetric information only individuals with the same type of preferences transfer, under asymmetric information different types transfer at the same time. As a consequence and the main finding of our experiment, uninformed dictators behave more prosocially than informed dictators. In an ex-post analysis of our experiment we also find that the differences in behavior under symmetric information are mostly driven by gender: women tend to be more inequality-averse, men tend to be more efficiency-concerned. Yet, both transfer under asymmetric information.

Changing Culture to Change Society?

Can culture be a policy variable, and hence of use to change society? What can we infer from the existing datasets and methods in economics? How different it is from what social scientists define as culture? Drawing on evidence from migrants interviewed in the European Values Study 2008- 2010 we show evidence of cultural persistence on a large set of attitudes suggesting that culture is a relevant variable for policy to account for. We then offer its downsides and then move to the meaning of culture in other social sciences which allows for more general equilibrium effects, and we propose to focus instead on cultural identity change reflecting newly internalized cultural norms. We argue that on the basis of the existing evidence there is some scope for changing cultural social norms that shape the locus of value (meaningfulness) in a society, which can in induce forms of ‘social change’. However, unlike with social norms, core beliefs in a society are likely to be culturally persistent.

Altruism and Egoism/Warm Glow in Economics and Psychology: Building a Bridge Between Different Experimental Approaches

The same dual–motive theory that combines altruism and egoism/warm glow is used in economics to study charitable giving and in psychology to study helping behavior. However, the two disciplines have taken different approaches to experimental testing. This paper builds a bridge between the different experimental approaches. For economists, the importance of this bridge is that it leads to a systematic description of six specific types of egoism/warm glow, and further suggests experimental designs that could be used to investigate warm glow motives in charitable giving. For psychologists, the bridge is important because the experimental design in economics suggests a way to test, directly rather than indirectly, the empathy–altruism hypothesis.

Cultural Persistence and the Pill

This paper reviews the literature in economics and related fields on the role of social norms in shaping fertility patterns and demand for contraception. The case of Sweden is discussed in detail both with regard to the literature and the data. Measures of non-marital childbearing from the 19th and early 20th Century are presented and compared in relation to demand for oral contraceptives (‘the Pill’) over a half century later. The correlation of Pill take-up with historical illegitimacy is strongly positive, regardless of the measure used. The geographical variation of illegitimacy and contraceptive demand follow a strikingly similar pattern that is independent of urbanization and North/South development patterns.

The Role of Repugnance in the Development of Markets: The Case of the Market for Transplantable Kidneys

Economic efficiency is a criterion commonly used in economic analyses to establish an order of preference between different policy alternatives. However, in many societal situations where decisions on policy are made it would seem that this criterion is not the one most often prevails. This paper examines a disgust or repugnance factor, and examines how this factor operates as a restriction on certain transactions in the market and the consequences of these restrictions. This repugnance concept, developed by Al Roth (2007), suggests that some transactions, such as the purchase and sale of kidneys for transplants are illegal simply because a sufficient number of people find it repugnant. This paper demonstrates that the level of the repugnant reaction depends on circumstances and is closely associated with the social cost imposed by the development, prohibition or regulation of a kidney transplant market.

Cultural Determinants of Gender Roles: “Pragmatism” as an Underpinning Attitude toward Gender Equality among Children of Immigrants

This chapter presents evidence of how attitudes toward gender roles in the home and market are shaped by Hofstede’s six cultural dimensions. Children of immigrants in a broad set of European countries with ancestry from across the world are studied. Individuals are examined within country of residence using variation in cultural dimensions across countries of ancestry. The approach focuses attention on how gender roles are shaped across generations within families. Both influences on the father’s and mother’s side are studied. Ancestry from more masculine cultures shape more traditional gender roles on both parents’ sides. On the father side more pragmatic cultures foster gender equality on the mother’s side power distance promote equality attitudes, although this influence differs markedly between daughters and sons. Pragmatism is in several circumstances the strongest influence on gender norms.

Measuring Value Diversity within Countries

Diversity research has shown that ethno-linguistic, religious, and genetic diversity are related to a variety of socio-economic outcomes. We complement this literature by focusing on a dimension of diversity so far ignored in diversity research for lack of data: Diversity in key human values. Using data from all available waves of the World Values Survey and the European Values Study we develop a multi-item indicator of value diversity. This measure reflects the extent to which key human values are shared among the inhabitants of a country. Our newly developed measure is available for up to 111 countries and three decades (1981-2014). We conclude by comparing our newly developed measure of value diversity with existing measures of social diversity and relating it to various indicator of socio-economic performance.

Social Economics: Current and Emerging Avenues

The separation of economics and sociology as distinct disciplines can be traced back to at least the so-called “ordinal revolution” (Pareto 1900, 1909) and the subsequent development of ‘marginalism’ and modern economics. Pareto’s division between ‘political economy’ (as the science of the economic system driven by rational factors like interests and appetites) and ‘sociology’ (or the science of the sociological system determined by ‘irrational’ forces such as sentiments/residues and derivations) had a profound and lasting influence on both disciplines. In spite of the separation and the different methodological approaches, the conversation and cross-pollination between economics and sociology never stopped, and has been often fruitful. Major early examples include Veblen’s study of institutions and of the interaction of economic changes and cultural and social changes (Veblen, 1899), Polanyi’s “embeddedness” argument and the idea that non-economic factors (e.g., social conventions) act as constraints on people’s economic behavior. More generally, the interactions between economics and other disciplines (e.g., psychology) have been more intense than it might seem at first sight. For instance, Herbert Simon’s idea that human choice is often best explained as being the result of “satisficing” as opposed to “maximizing” behavior (Simon 1955, 1956, 1957) is today a central tenet of behavioral economics, which, it can be argued, has obtained mainstream status.

Why Give Away Your Wealth? An Analysis of the Billionaires’ View

We explore what motivates the philanthropic activity of extremely wealthy individuals and families. We focus on a recent large-scale philanthropic initiative by billionaires, the Giving Pledge, a commitment to donating half or more of one's wealth. We perform two pieces of analysis: first, we investigate what personal characteristics of billionaires are associated with becoming a pledger. Second, we undertake a textual analysis of the pledgers' letters describing their philanthropic outlook and classify their motivation into ten categories. We then correlate these motivational categories with various personal characteristics of the pledgers. The main insights obtained from our analysis is that pledgers are more likely to be self-made billionaires, and that their philanthropy is impact-driven.