Putting Social Preferences to Work: Can Revealed Preferences Predict Real Effort Provision

Abstract

This paper presents a model of real effort provision in conjunction with social preference theory to predict how individuals exert effort to replace an exogenously determined "state of the world" with a preferred social outcome. Binary dictator games and real effort tasks are used to examine whether individuals exert effort in a manner that is consistent with their revealed preferences. The analysis of controlled laboratory experiments suggest that while individuals' effort provisions are generally consistent with the theory, those who reveal relatively pro-social preferences fail to procure their "preferred" outcomes too frequently when the state of the world is highly inequitable in their favor.

Keywords: Social Preferences, Real Effort, Revealed Preference

JEL Classification: C71, C91, D64