Does Entitlement Crowd Out Efficiency or Equality Seeking? - Selling the Roles in Generosity Game Experiments -

Agnes Bäker, Werner Güth (), Kerstin Pull and Manfred Stadler

No 2010-091, Jena Economics Research Papers from Friedrich-Schiller-University Jena

Abstract: In generosity games, one agreement payoff is exogenously given, whereas the other is endogenously determined by the proposer's choice of the "pie" size. This has been shown to induce pie choices which are either efficiency or equality seeking. In our experiment, before playing the generosity game, participants are asked to buy their role via a random price mechanism. This should entitle them to exploit the chances which their role provides and at the same time avoid the selection bias of competitive auctions. We find that entitlement crowds out equality seeking and strengthens efficiency seeking. Interpreting participants' willingness to pay as an aspiration level of how much they want to earn, our design further allows us to test for satisficing behavior. Indeed, we find evidence for satisficing behavior in the data.

Keywords: Entitlement; Generosity Game; Efficiency Seeking; Inequity Aversion; Satisficing (search for similar items in EconPapers)
JEL-codes: C7 C91 D03 (search for similar items in EconPapers)
Date: 2010-12-14
New Economics Papers: this item is included in nep-evo, nep-exp and nep-ltv
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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