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„Selfish in the end?“ An investigation of consistency and stability of individual behavior. Jeannette Brosig*, Thomas Riechmann, Joachim Weimann *University of Cologne / University of Magdeburg. We have a lot of behavioral anomalies observed in the labs. (cooperation, gift giving …)
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„Selfish in the end?“An investigation of consistency and stabilityof individual behavior Jeannette Brosig*, Thomas Riechmann, Joachim Weimann *University of Cologne / University of Magdeburg
We have a lot of behavioral anomalies observed in the labs. (cooperation, gift giving …) • And we have non-standard theories trying to explain these anomalies. (reciprocity, social preferences …)
How to test these theories? We make use of the following: • All none standard theories have in common: • They stick to the assumption that subjects behave rational. • They assume some kind of “other regarding preferences”. • This implies that all theories assume • that individuals behave consistently with respect to these preferences. • that their behavior is stable over time (in identical situations they will decide identically). Testing the consistency and stability of individual decisions therefore puts the non-standard theories to the experimental test!
The tested theories • We define consistency of individual behavior with respect to: • Standard theory • Payoff maximization • Fehr/Schmidt and Charness/Rabin • Not identical in general, but make identical predictions for our games. • Inequality aversion matters • Andreoni/Miller • Own payoff and payoff of others are “normal goods”.
Our Games • Two modified dictator games • Take game: • two players are endowed with € 5.00 each • player A (the dictator) can “take” money from player B (€ x) • his own payoff increases by m x • four treatments with m equal to 2; 1.5; 1; 0.5 • Give games • player A can “give” money to player B (€ x ) • B’s payoff increases by m x • four treatments with m equal to 2; 1.5; 1; 0.5
TAKE GIVE
Setup of the experiment • All ten games were played in two sessions at two subsequent days. • These two sessions were repeated twice with the same subjects (3 waves). • Between two waves there was a period of one month. • In all three waves, subjects were confronted with exactly the same games, but they played with different partners (players B). • Players B were newly recruited for each wave. • Partners were randomly matched within a session (perfect stranger design). • Only at the start of the third wave subjects were informed about the sequence of the games • The sequence was the same in all waves. • All experiments were double blind.
Consistency and stability • Within game consistency • Do subjects behave consistently in the • four Take games, • four Give games and the • two PD games?
Across game consistency • Is the behavior consistent in all three classes of games? • Stability • Is behavior stable over time, i.e. do subjects behave identically in identical games?
Results Aggregate behavior in Take and Give games Wave 1 Wave 2 Wave 3
Aggregate behavior in PD games D moves after a D move D moves after a C move Wave 1 Wave 2 Wave 3
Consistency rates within games • In Take and Give: Selfishness is a special case of FS/CR and A/M • The increase of consistency is almost always due to the fact that, over time, more and more subjects make consistently selfish decisions • In wave 3, about ¼ of all subjects behave inconsistently in the PD game.
Consistency across games • In the first two waves, subjects (sometimes) deviate from selfish behavior. • In wave 3, nearly 60% stick to their consistently selfish behavior in all games.
Every stable behavior is strictly selfish. We could not find any subject displaying stable, non-selfish preferences
Discussion • Wave 1 reproduces the well known results. • But subjects change their behavior over time: • All changes of behavior are in the same direction. • They become more and more selfish. • Thus: What is the relevant experimental evidence? • “inexperienced” behavior in wave 1 or more “mature” behavior in wave 3? • What do we learn from our experiment, • that subjects have “other regarding preferences” or • that “social preferences” are not that important in anonymous situations?