Hostname: page-component-7b9c58cd5d-g9frx Total loading time: 0 Render date: 2025-03-16T21:12:21.680Z Has data issue: false hasContentIssue false
  • English
  • Français

Are social preferences related to market performance?

Published online by Cambridge University Press:  14 March 2025

Andreas Leibbrandt
Andreas Leibbrandt*
Affiliation:
Department of Economics, Monash University, Clayton 3800, Victoria, Australia
*
[email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

This paper combines laboratory with field data from professional sellers to study whether social preferences are related to performance in open-air markets. The data show that sellers who are more pro-social in a laboratory experiment are also more successful in natural markets: They achieve higher prices for similar quality, have superior trade relations and better abilities to signal trustworthiness to buyers. These findings suggest that social preferences play a significant role for outcomes in natural markets.

Keywords

Social preferencesMarket performanceExternal validityQuality misrepresentationOpen-air markets

JEL classification

D49: Other C91: Laboratory, Individual Behavior C93: Field Experiments
Type
Research Article
Information
Experimental Economics , Volume 15 , Issue 4 , December 2012 , pp. 589 - 603
Copyright
Copyright © 2012 Economic Science Association

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Andreoni, J. (1990). Impure altruism and donations to public goods: a theory of warm-glow giving?. Economic Journal, 100(401), 464–477. 10.2307/2234133CrossRefGoogle Scholar
Barr, A., Ensminger, J., Johnson, J. Cook, K., Levi, M., & Hardin, R. (2009). Social networks and trust in cross-cultural economic experiments. Whom can we trust?, New York: Russell Sage Foundation.Google Scholar
Barr, A., & Serneels, P. (2009). Reciprocity in the workplace. Experimental Economics, 12, 99–112. 10.1007/s10683-008-9202-8CrossRefGoogle Scholar
Bolton, G., & Ockenfels, A. (2000). ERC: a theory of equity, reciprocity, and competition. American Economic Review, 90(1), 166–193. 10.1257/aer.90.1.166CrossRefGoogle Scholar
Bowles, S., Gintis, H., & Osborne, M. (2001). The determinants of earnings: a behavioral approach. Journal of Economic Literature, 39(4), 1137–1176. 10.1257/jel.39.4.1137CrossRefGoogle Scholar
Brown, M., Falk, A., & Fehr, E. (2005). Relational contracts and the nature of market interaction. Econometrica, 72(3), 747–780. 10.1111/j.1468-0262.2004.00511.xCrossRefGoogle Scholar
Camerer, C. (2003). Behavioral game theory, Princeton: Princeton University Press.Google Scholar
Carpenter, J., & Seki, E. (2010). Do social preferences increase productivity? Field experimental evidence from fishermen in Toyama Bay. Economic Inquiry, 49(2), 612–630. 10.1111/j.1465-7295.2009.00268.xCrossRefGoogle Scholar
Charness, G., & Rabin, M. (2002). Understanding social preferences with simple tests. The Quarterly Journal of Economics, 117, 817–869. 10.1162/003355302760193904CrossRefGoogle Scholar
Cox, J. C., Friedman, D., & Gjerstad, S. (2007). A tractable model of reciprocity and fairness. Games and Economic Behavior, 59, 17–45. 10.1016/j.geb.2006.05.001CrossRefGoogle Scholar
Dohmen, T., Falk, A., Huffman, D., & Sunde, U. (2009). Homo reciprocans: survey evidence on behavioral outcomes. Economic Journal, 536, 592–612. 10.1111/j.1468-0297.2008.02242.xCrossRefGoogle Scholar
Dufwenberg, M., & Kirchsteiger, G. (2004). A theory of sequential reciprocity. Games and Economic Behavior, 47(2), 268–298. 10.1016/j.geb.2003.06.003CrossRefGoogle Scholar
Falk, A., & Fischbacher, U. (2006). A theory of reciprocity. Games and Economic Behavior, 54(2), 293–315. 10.1016/j.geb.2005.03.001CrossRefGoogle Scholar
Fehr, E., & Gächter, S. (2000). Cooperation and punishment in public goods experiments. American Economic Review, 90, 980–994. 10.1257/aer.90.4.980CrossRefGoogle Scholar
Fehr, E., Götte, L., & Zehnder, C. (2009). A behavioral approach to the labor market: the role of fairness concerns. Annual Review of Economics, 1, 355–384. 10.1146/annurev.economics.050708.143217CrossRefGoogle Scholar
Fehr, E., Kirchsteiger, G., & Riedl, A. (1993). Does fairness prevent market clearing? An experimental investigation. The Quarterly Journal of Economics, 108(2), 437–459. 10.2307/2118338CrossRefGoogle Scholar
Fehr, E., & Leibbrandt, A. (2011). A field study on cooperativeness and impatience in the tragedy of the commons. Journal of Public Economics, 95, 1144–1155. 10.1016/j.jpubeco.2011.05.013CrossRefGoogle Scholar
Fehr, E., & Schmidt, K. (1999). A theory of fairness, competition and cooperation. The Quarterly Journal of Economics, 114(3), 817–868. 10.1162/003355399556151CrossRefGoogle Scholar
Güth, W., Schmittberger, R., & Schwarze, B. (1982). An experimental analysis of ultimatum bargaining. Journal of Economic Behavior & Organization, 3, 367–388. 10.1016/0167-2681(82)90011-7CrossRefGoogle Scholar
Jin, G., & Kato, A. (2006). Price, quality, and reputation: evidence from an online field experiment. The Rand Journal of Economics, 37(4), 983–1005. 10.1111/j.1756-2171.2006.tb00067.xCrossRefGoogle Scholar
Karlan, D. (2005). Using experimental economics to measure social capital and predict financial decisions. American Economic Review, 95(5), 1688–1699. 10.1257/000282805775014407CrossRefGoogle Scholar
List, J. (2006). The behavioralist meets the market: measuring social preferences and reputation effects in actual transactions. Journal of Political Economy, 114(51), 1–37. 10.1086/498587CrossRefGoogle Scholar
López-Pérez, R. (2008). Aversion to norm-breaking: a model. Games and Economic Behavior, 64, 237–267. 10.1016/j.geb.2007.10.009CrossRefGoogle Scholar
Rabin, M. (1993). Incorporating fairness into game theory and economics. American Economic Review, 83(5), 1281–1302.Google Scholar
Roth, A. Kagel, J., & Roth, A. (1995). Bargaining experiments. Handbook of experimental economics, Princeton: Princeton University Press.Google Scholar
Sobel, J. (2005). Interdependent preferences and reciprocity. Journal of Economic Literature, XLIII, 392–436. 10.1257/0022051054661530CrossRefGoogle Scholar
Weisbuch, G., Kirman, A., & Herreiner, D. (2000). Market organisation and trading relationships. Economic Journal, 110, 411–436. 10.1111/1468-0297.00531CrossRefGoogle Scholar