Are People Equally Other‐Regarding When Selecting a Match Versus Choosing an Allocation?

Michèle Belot and Marcel Fafchamps

Southern Economic Journal, 2018, vol. 84, issue 4, 1088-1108

Abstract: There are many assignment processes in which agents are given the opportunity to unilaterally select a match. Resulting allocations can be inefficient if agents do not internalize the consequences of their choice on others. To test this formally, we study how other‐regarding behaviors vary across two decision contexts: when subjects make a pure allocation decision; and when they select a partner. In both settings each subject's decision is final and it affects their payoff and that of other subjects in the same way. We find that subjects are more likely to sacrifice their own material well‐being to increase that of others when dividing a pie than when selecting a partner in a large anonymous setting—even though the consequences on the material payoffs of others are identical. These findings suggest that in assignment processes with unilateral selection, efficiency can be improved by presenting the selection process as a choice between outcomes involving multiple individuals, instead of simply selecting a match for themselves.

Date: 2018
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https://doi.org/10.1002/soej.12267

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Persistent link: https://EconPapers.repec.org/RePEc:wly:soecon:v:84:y:2018:i:4:p:1088-1108

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