Direct Tests of Individual Preferences for Efficiency and Equity

32 Pages Posted: 28 Feb 2011

See all articles by James C. Cox

James C. Cox

Georgia State University - Department of Economics

Vjollca Sadiraj

Georgia State University - Department of Economics

Date Written: April 2010

Abstract

Departures from "economic man" behavior in many games in which fairness is a salient characteristic are now well documented in the experimental economics literature. These data have inspired development of models of social preferences that assume agents have preferences for equity and efficiency as well as their own material payoffs. Empirical failure of the economic man model comes from experiments that provide direct tests of its distinguishing characteristic: indifference to the payoffs of others. This paper reports an experiment that subjects popular social preferences models to the same type of empirical challenge. We report direct tests of the distinguishing characteristics of these models: preference for allocations that have higher efficiency and greater equity.

Keywords: social preferences, efficiency, equity, experiments

JEL Classification: A12, A13, B49, C70, C91, D63

Suggested Citation

Cox, James C. and Sadiraj, Vjollca, Direct Tests of Individual Preferences for Efficiency and Equity (April 2010). Andrew Young School of Policy Studies Research Paper Series No. 11-12, Available at SSRN: https://ssrn.com/abstract=1769912 or http://dx.doi.org/10.2139/ssrn.1769912

James C. Cox (Contact Author)

Georgia State University - Department of Economics ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States
404-651-8888 (Phone)
404-651-0425 (Fax)

Vjollca Sadiraj

Georgia State University - Department of Economics ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States

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