Individual Preferences for Giving

This paper reports an experimental test of individual preferences for giving. We use graphical representations of modified Dictator Games that vary the price of giving. This generates a very rich data set well- suited to studying behavior at the level of the individual subject. We test the data for consistency with preference maximization, and we recover underlying preferences and forecast behavior using both nonparametric and parametric methods. Our results emphasize that classical demand theory can account surprisingly well for behaviors observed in the laboratory and that individual preferences for giving are highly heterogeneous, ranging from utilitarian to Rawlsian to perfectly selfish.Experiment, Fairness, Dictator Game, and Revealed Preference

Distinguishing Social Preferences from Preferences for Altruism

We report a laboratory experiment that enables us to distinguish preferences for altruism (concerning tradeoffs between own payoffs and the payoffs of others) from social preferences (concerning tradeoffs between the payoffs of others). By using graphical representations of three-person Dictator Games that vary the relative prices of giving, we generate a very rich data set well-suited to studying behavior at the level of the individual subject. We attempt to recover subjects’ underlying preferences by estimating a constant elasticity of substitution (CES) model that represents altruistic and social preferences. We find that both social preferences and preferences for altruism are highly heterogeneous, ranging from utilitarian to Rawlsian. In spite of this heterogeneity across subjects, there exists a strong positive withinsubject correlation between the efficiency-equity tradeoffs made in altruistic and social preferences.

Consistency, Heterogeneity, and Granularity of Individual Behavior under Uncertainty

By using graphical representations of budget sets over bundles of state-contingent commodities, we generate a very rich data set well-suited to studying behavior under uncertainty at the level of the individual subject. We test the data for consistency with the maximization hypothesis, and we estimate preferences using a two-parameter utility function based on Faruk Gul (1991). This specification provides a good interpretation to the data at the level of the individual subject and can account for the highly heterogeneous behaviors observed in the laboratory. The parameter estimates jointly describe attitudes toward risk and allow us to characterize the distribution of risk preferences in the population.uncertainty, revealed preference, Expected Utility Theory, loss/disappointment aversion, experiment

Experimental evidence of physician social preferences

Physicians' professional ethics require that they put patients' interests ahead of their own and that they should allocate limited medical resources efficiently. Understanding physicians' extent of adherence to these principles requires understanding the social preferences that lie behind them. These social preferences may be divided into two qualitatively different trade-offs: the trade-off between self and other (altruism) and the trade-off between reducing differences in payoffs (equality) and increasing total payoffs (efficiency). We experimentally measure social preferences among a nationwide sample of practicing physicians in the United States. Our design allows us to distinguish empirically between altruism and equality-efficiency orientation and to accurately measure both trade-offs at the level of the individual subject. We further compare the experimentally measured social preferences of physicians with those of a representative sample of Americans, an "elite" subsample of Americans, and a nationwide sample of medical students. We find that physicians' altruism stands out. Although most physicians place a greater weight on self than on other, the share of physicians who place a greater weight on other than on self is twice as large as for all other samples-32% as compared with 15 to 17%. Subjects in the general population are the closest to physicians in terms of altruism. The higher altruism among physicians compared with the other samples cannot be explained by income or age differences. By contrast, physicians' preferences regarding equality-efficiency orientation are not meaningfully different from those of the general sample and elite subsample and are less efficiency oriented than medical students.K01 AG066946 - NIA NIH HHSPublished versio

The Distributional Preferences of Americans *

Abstract This paper characterize the distributional preferences of a large and diverse sample of Americans. We decompose distributional preferences into two distinct components -fair-mindedness (tradeoffs between oneself and others) and equality-efficiency tradeoffs -by estimating constant elasticity of substitution utility functions at the individual level. We find considerable heterogeneity in both the extent of fairmindedness and willingness to trade off equality and efficiency, much of which cannot be explained by standard demographic and socioeconomic characteristics. After controlling for individual characteristics, our experimental measure of equality-efficiency tradeoffs predicts the political decisions of our subjects; there is no significant relationship between our experimental measure of fair-mindedness and political preferences. Since optimal tax policy depends on the distributional preferences of voters and taxpayers, our findings can inform debates about government redistribution. JEL Classification Numbers: C91, D6

Distinguishing Social Preferences from Preferences for Altruism

We report a laboratory experiment that enables us to distinguish preferences for altruism (concerning trade-offs between own payoffs and the payoffs of others) from social preferences (concerning trade-offs between the payoffs of others). By using graphical representations of three-person Dictator Games that vary the relative prices of giving,we generate a very rich data set well-suited to studying behavior at the level of the individual subject. We attempt to recover subjects’underlying preferences by estimating a constant elasticity of substitution (CES) model that represents altruistic and social preferences. We find that both social preferences and preferences for altruism are highly heterogeneous, ranging from utilitarian to Rawlsian. In spite of this heterogeneity across subjects, there exists a strong positive within subject correlation between the efficiency-equity trade-offs made in altruistic and social preferences

The Distributional Preferences of Americans *

Abstract We measure the distributional preferences of a large, diverse sample of Americans by embedding modified dictator games that vary the relative price of redistribution in the American Life Panel. Subjects' choices are generally consistent with maximizing a (social) utility function. We decompose distributional preferences into two distinct components -fair-mindedness (tradeoffs between oneself and others) and equality-efficiency tradeoffs -by estimating constant elasticity of substitution utility functions at the individual level. Approximately equal numbers of Americans have equality-focused and efficiency-focused distributional preferences. After controlling for individual characteristics, our experimental measures of equality-efficiency tradeoffs predict the political decisions of our subjects. JEL Classification Numbers: C91, D64 * We thank Daniel Markovits and Daniel Silverman for helpful discussions and comments. This paper has also benefited from suggestions by the participants of seminars at several universities and conferences. We thank the American Life Panel team at the RAND Corporation for software development and technical and administrative support. We acknowledge financial support from the Center for Equitable Growth (CEG) at th