Altruism, Equity, and Reciprocity in a Gift Exchange Experiment: An Encompassing Approach
Universitat Pompeu Fabra, Department of Economics Working Paper No. 368
42 Pages Posted: 5 Aug 1999
Date Written: March 1999
Abstract
Considerable experimental evidence suggests that non-pecuniary motives must be addressed when modeling behavior in economic contexts. Recent models of non-pecuniary motives can be classified as either altruism- based, equity-based, or reciprocity-based. We estimate and compare leading approaches in these categories, using experimental data. We then offer a flexible approach that nests the above three approaches, thereby allowing for nested hypothesis testing and for determining the relative strength of each of the competing theories. In addition, the encompassing approach provides a functional form for utility in different settings without the restrictive nature of the approaches nested within it. Using this flexible form for nested tests, we find that intentional reciprocity, distributive concerns, and altruistic considerations all play a significant role in players' decisions.
JEL Classification: A13, C50, C70, C91, D21, J30
Suggested Citation: Suggested Citation
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