Social Preferences and Strategic Uncertainty: An Experiment on Markets and Contracts

Publikation: Working paperForskning

Standard

Social Preferences and Strategic Uncertainty : An Experiment on Markets and Contracts. / Cabrales, Antonio; Miniaci, Raffaele; Piovesan, Marco; Ponti, Giovanni.

Department of Economics, University of Copenhagen, 2008.

Publikation: Working paperForskning

Harvard

Cabrales, A, Miniaci, R, Piovesan, M & Ponti, G 2008 'Social Preferences and Strategic Uncertainty: An Experiment on Markets and Contracts' Department of Economics, University of Copenhagen.

APA

Cabrales, A., Miniaci, R., Piovesan, M., & Ponti, G. (2008). Social Preferences and Strategic Uncertainty: An Experiment on Markets and Contracts. Department of Economics, University of Copenhagen.

Vancouver

Cabrales A, Miniaci R, Piovesan M, Ponti G. Social Preferences and Strategic Uncertainty: An Experiment on Markets and Contracts. Department of Economics, University of Copenhagen. 2008.

Author

Cabrales, Antonio ; Miniaci, Raffaele ; Piovesan, Marco ; Ponti, Giovanni. / Social Preferences and Strategic Uncertainty : An Experiment on Markets and Contracts. Department of Economics, University of Copenhagen, 2008.

Bibtex

@techreport{3ea7d010eb9211dcbee902004c4f4f50,
title = "Social Preferences and Strategic Uncertainty: An Experiment on Markets and Contracts",
abstract = "This paper reports experimental evidence on a stylized labor market. The experiment is designed as a sequence of three phases. In the first two phases, P1 and P2; agents face simple games, which we use to estimate subjects' social and reciprocity concerns, together with their beliefs. In the last phase, P3; four principals, who face four teams of two agents, compete by offering agents a contract from a fixed menu. Then, each agent selects one of the available contracts (i.e. he {"}chooses to work{"} for a principal). Production is determined by the outcome of a simple effort game induced by the chosen contract. We find that (heterogeneous) social preferences are significant determinants of choices in all phases of the experiment. Since the available contracts display a trade-off between fairness and strategic uncertainty, we observe that the latter is a much stronger determinant of choices, for both principals and agents. Finally, we also see that social preferences explain, to a large extent, matching between principals and agents, since agents display a marked propensity to work for principals with similar social preferences",
keywords = "Faculty of Social Sciences, team incentives, mechanism design, experimental economics",
author = "Antonio Cabrales and Raffaele Miniaci and Marco Piovesan and Giovanni Ponti",
note = "JEL Classification: C90; D86",
year = "2008",
language = "English",
publisher = "Department of Economics, University of Copenhagen",
address = "Denmark",
type = "WorkingPaper",
institution = "Department of Economics, University of Copenhagen",

}

RIS

TY - UNPB

T1 - Social Preferences and Strategic Uncertainty

T2 - An Experiment on Markets and Contracts

AU - Cabrales, Antonio

AU - Miniaci, Raffaele

AU - Piovesan, Marco

AU - Ponti, Giovanni

N1 - JEL Classification: C90; D86

PY - 2008

Y1 - 2008

N2 - This paper reports experimental evidence on a stylized labor market. The experiment is designed as a sequence of three phases. In the first two phases, P1 and P2; agents face simple games, which we use to estimate subjects' social and reciprocity concerns, together with their beliefs. In the last phase, P3; four principals, who face four teams of two agents, compete by offering agents a contract from a fixed menu. Then, each agent selects one of the available contracts (i.e. he "chooses to work" for a principal). Production is determined by the outcome of a simple effort game induced by the chosen contract. We find that (heterogeneous) social preferences are significant determinants of choices in all phases of the experiment. Since the available contracts display a trade-off between fairness and strategic uncertainty, we observe that the latter is a much stronger determinant of choices, for both principals and agents. Finally, we also see that social preferences explain, to a large extent, matching between principals and agents, since agents display a marked propensity to work for principals with similar social preferences

AB - This paper reports experimental evidence on a stylized labor market. The experiment is designed as a sequence of three phases. In the first two phases, P1 and P2; agents face simple games, which we use to estimate subjects' social and reciprocity concerns, together with their beliefs. In the last phase, P3; four principals, who face four teams of two agents, compete by offering agents a contract from a fixed menu. Then, each agent selects one of the available contracts (i.e. he "chooses to work" for a principal). Production is determined by the outcome of a simple effort game induced by the chosen contract. We find that (heterogeneous) social preferences are significant determinants of choices in all phases of the experiment. Since the available contracts display a trade-off between fairness and strategic uncertainty, we observe that the latter is a much stronger determinant of choices, for both principals and agents. Finally, we also see that social preferences explain, to a large extent, matching between principals and agents, since agents display a marked propensity to work for principals with similar social preferences

KW - Faculty of Social Sciences

KW - team incentives

KW - mechanism design

KW - experimental economics

M3 - Working paper

BT - Social Preferences and Strategic Uncertainty

PB - Department of Economics, University of Copenhagen

ER -

ID: 3031723