TY - JOUR
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: JEL D82, D86, J41
PY - 2010/12
Y1 - 2010/12
N2 - This paper reports a three-phase experiment on a stylized labor market. In the first two phases, agents face simple games, which we use to estimate subjects' social and reciprocity concerns. In the last phase, four principals compete by offering agents a contract from a fixed menu. Then, agents "choose to work" for a principal by selecting one of the available contracts. We find that (i) (heterogeneous) social preferences are significant determinants of choices, (ii) for both principals and agents, strategic uncertainty aversion is a stronger determinant of choices than fairness, and (iii) agents display a marked propensity to work for principals with similar distributional concerns.
AB - This paper reports a three-phase experiment on a stylized labor market. In the first two phases, agents face simple games, which we use to estimate subjects' social and reciprocity concerns. In the last phase, four principals compete by offering agents a contract from a fixed menu. Then, agents "choose to work" for a principal by selecting one of the available contracts. We find that (i) (heterogeneous) social preferences are significant determinants of choices, (ii) for both principals and agents, strategic uncertainty aversion is a stronger determinant of choices than fairness, and (iii) agents display a marked propensity to work for principals with similar distributional concerns.
U2 - 10.1257/aer.100.5.2261
DO - 10.1257/aer.100.5.2261
M3 - Journal article
SN - 0002-8282
VL - 100
SP - 2261
EP - 2278
JO - American Economic Review (Print Edition)
JF - American Economic Review (Print Edition)
IS - 5
ER -