Good Samaritans and the Market: Experimental Evidence on Other-Regarding Preferences in Partnership Formation

Marcel Fafchamps and Michèle Belot

No 11017, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We construct an experiment to study the role of other-regarding preferences in the process of partnership formation. The literature on decentralized matching describes the process of match formation as a market-like process while the literature on other-regarding preferences suggests that such preferences are particularly strong in small partnerships. So we ask: do people apply market-like heuristics when searching for a partner (i.e. behave selfishly); or do they behave more pro-socially, as they do once these partnerships or small entities are formed? And if they do behave differently, what motivates differences in behavior? We focus on one possible mechanism explaining differences in behavior: the saliency of the implications of choices on others. We compare partnership choices in three treatments, varying the saliency of the implications of choices on others. We find that a market-like situation reduces the `good samaritan' spirit in this environment as well: when choosing a partner agents are less likely to sacrifice their own material well-being to increase the well-being of others.

Keywords: Efficiency; Inequality; Markets; Other-regarding preferences; Partnership formation (search for similar items in EconPapers)
JEL-codes: A13 C91 D61 D63 D64 (search for similar items in EconPapers)
Date: 2015-12
New Economics Papers: this item is included in nep-exp, nep-gth and nep-soc
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