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Social preferences: fundamental characteristics and economic consequences


Fehr, Ernst; Charness, Gary (2024). Social preferences: fundamental characteristics and economic consequences. Working paper series / Department of Economics 432, University of Zurich.

Abstract

We review the vast literature on social preferences by assessing what is known about their fundamental properties, their distribution in the broader population, and their consequences for important economic and political behaviors. We provide, in particular, an overview of the empirical characteristics of distributional preferences and how they are affected by merit, luck, and concerns for equality of opportunity. In addition, we identify what is known about belief-dependent social preferences such as reciprocity and guilt aversion. Furthermore, we discuss and assess the empirical relevance of self image and social image concerns in prosocial behaviors. The overall evidence indicates that a large majority of individuals have some sort of social preference, while purely selfinterested subjects are a minority. We also document the converging insights from lab and field evidence on the role of social preferences for a deeper understanding of important phenomena such as the consequences of wage inequality on work morale, employees’ resistance to wage cuts, individuals’ self-selection into occupations that are more or less prone to morally problematic behaviors, as well as issues of distributive politics. However, although much has been learned in recent decades, there are still many important, unresolved, yet exciting, questions waiting to be tackled.

Abstract

We review the vast literature on social preferences by assessing what is known about their fundamental properties, their distribution in the broader population, and their consequences for important economic and political behaviors. We provide, in particular, an overview of the empirical characteristics of distributional preferences and how they are affected by merit, luck, and concerns for equality of opportunity. In addition, we identify what is known about belief-dependent social preferences such as reciprocity and guilt aversion. Furthermore, we discuss and assess the empirical relevance of self image and social image concerns in prosocial behaviors. The overall evidence indicates that a large majority of individuals have some sort of social preference, while purely selfinterested subjects are a minority. We also document the converging insights from lab and field evidence on the role of social preferences for a deeper understanding of important phenomena such as the consequences of wage inequality on work morale, employees’ resistance to wage cuts, individuals’ self-selection into occupations that are more or less prone to morally problematic behaviors, as well as issues of distributive politics. However, although much has been learned in recent decades, there are still many important, unresolved, yet exciting, questions waiting to be tackled.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Working Paper Series > Department of Economics
Dewey Decimal Classification:330 Economics
Scope:Discipline-based scholarship (basic research)
Language:English
Date:March 2024
Deposited On:20 Apr 2023 07:32
Last Modified:30 Apr 2024 11:13
Series Name:Working paper series / Department of Economics
Number of Pages:83
ISSN:1664-7041
Additional Information:Revised version ; Auch publiziert als URPP Equality of Opportunity Discussion Paper No. 44 (https://www.zora.uzh.ch/id/eprint/255996/).
OA Status:Green
Related URLs:https://www.zora.uzh.ch/id/eprint/255996/
https://www.econ.uzh.ch/en/research/workingpapers.html
Other Identification Number:merlin-id:23643
  • Content: Published Version
  • Language: English
  • Permission: Download for registered users
  • Description: Version April 2023
  • Content: Updated Version
  • Language: English
  • Description: Revised version March 2024