An experimental investigation of endowment source heterogeneity in two-person public good games

Spraggon, John M.; Oxoby, Robert J.

doi:10.1016/j.econlet.2009.04.012

Cited by 34 publications

(21 citation statements)

References 23 publications

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“…Although emotions, social value orientation, and other individual differences are important for understanding the antecedents of fair bargaining (e.g., Stephen & Pham, 2008;van Dijk et al, 2004), there is some evidence that fairness is contextspecific or relationship-specific, varying with the information presented or the domain of the social interaction (e.g., Fiddick & Cummins, 2007). A few recent studies have even altered the context of bargaining games (e.g., dictator, public goods) to reveal that transactions are affected if proposers and responders are given property rights to the pot of money (Cherry, Frykblom, & Shogren, 2002;Leliveld, van Dijk, & van Beest, 2008;List, 2007;Oxoby & Spraggon, 2008;Spraggon & Oxoby, 2009;van Dijk et al, 2004). Additionally, changing the bargaining situation evokes different social norms which in turn influence fairness perceptions (Gamliel & Peer, 2006;Konow, 2003;Leliveld et al, 2008;March, 1994;Messick, 1999).…”

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confidence: 99%

Effort and Fairness in Bargaining Games

Franco‐Watkins

Edwards

Acuff

2011

Behavioral Decision Making

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Most real‐world negotiations involving monetary transactions require exertion of effort to procure services or commodities. Economic games that require individuals to split a pot of money (windfall) measure fairness boundaries in negotiations without accounting for effort. To examine how effort affects perceptions of fairness and allocation of resources during bargaining situations, we compared windfall with business situations in three experiments designed to examine effort from several unique perspectives: (a) implied effort manipulated by game description (all experiments); (b) perceptions of effort (Experiments 2 and 3); and (c) manipulation of indirect effort (Experiment 3). A consistent pattern emerged demonstrating that earned (through effort) and windfall monetary transactions differentially influenced perceived fairness. When effort was expended, participants placed a larger monetary value on that effort and compensated themselves and others accordingly. When no effort was involved, participants relied on egalitarian fairness norms. Copyright © 2011 John Wiley & Sons, Ltd.

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confidence: 99%

Effort and Fairness in Bargaining Games

Franco‐Watkins

Edwards

Acuff

2011

Behavioral Decision Making

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“…Experimental results from a prisoner's dilemma experiment with heterogeneous initial endowments but homogeneous benefits suggest that subjects earning their endowments contribute more to the joint project when they are matched with subjects whose endowment is randomly allocated (Spraggon and Oxoby 2009). In contrast, studies by Chan et al (1996Chan et al ( , 1999 and Buckley and Croson (2006) The literature on the impact of the origin of endowment differences on individual behavior in public goods games appears ambiguous.…”

Section: Related Literaturementioning

confidence: 83%

On the Performance of Rule-Based Contribution Schemes Under Endowment Heterogeneity

2014

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. On the performance of rule-based contribution schemes under endowment heterogeneity Abstract:We experimentally test different rule-based contribution mechanisms in a repeated 4-player public goods game with endowment heterogeneity and compare them to a VCM, distinguishing between a random-and an effort-based allocation of endowments. We find that endowment heterogeneities limit the efficiency gains from minimum contribution rules under random allocation. Under effort-based allocations, substantial efficiency gains relative to a VCM occur, though being largely driven by significant reductions of contributions in VCM. By apparently influencing the perception of fair burden sharing, the endowment allocation procedure crucially impacts voluntary contributions under VCM, while the rule-based mechanisms generate stable efficiency levels, even though endowment heterogeneity substantially limits the ability of rule-based mechanisms to achieve the potential efficiency gains.

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“…Cherry et al (2002) shows that subjects playing a dictator game are less generous with money obtained after a mental task (answering 10 out of 17 GMAT questions correctly) than with a windfall gain. Spraggon & Oxoby (2009) finds the opposite result in a public good game, and Cherry et al (2005) find no effect in a public good game. 3 This literature has shown that social preferences are source dependent.…”

Section: Introductionmentioning

confidence: 86%

Does Source of Income Affect Risk and Intertemporal Choices?

Hvide,

Lee

2015

SSRN Journal

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Economic theory predicts that consumption and investment choices should not depend on the source of the budget. We test this assumption through conducting two experiments. In both experiments, we divide participants into two groups: those that obtain an endowment through a windfall and those that obtain the same amount through completing a physical effort task. We show that individuals in the hard-earned group make significantly less risky and more patient choices than individuals in the windfall group. We corrobate the existence of source-dependent decision rules through surveying a large and representative sample of individuals. Our findings are consistent with versions of mental accounting theory where mental accounts are linked to source of income. We conclude that consumption and investment behavior are source-dependent, unlike what is assumed by economic theory.

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An experimental investigation of endowment source heterogeneity in two-person public good games

Cited by 34 publications

References 23 publications

Effort and Fairness in Bargaining Games

Effort and Fairness in Bargaining Games

On the Performance of Rule-Based Contribution Schemes Under Endowment Heterogeneity

Does Source of Income Affect Risk and Intertemporal Choices?

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