A Bliss Point Model of Distributional Preferences

Moira Gidseg

No 2601, Working Papers from College of the Holy Cross, Department of Economics

Abstract: In this study, I propose a new model of distributional preferences, the “Bliss Point†model. According to this model, each person has a preferred payoff for others which is a linear function of his own payoff, and he suffers a utility penalty proportional to the distance between this bliss point for his co-players and the actual payoffs. To evaluate the empirical relevance of this model, I create an experiment in which subjects play several games which affect both their own payoff and that of an anonymous partner. I used their behavior to estimate individual-level parameters of my model as well as three others: inequality aversion (Fehr & Schmidt, 1999), quasi-maximin (Charness & Rabin, 2002), and constant elasticity of substitution (Andreoni & Miller, 2002). I then compare the models’ ability to predict behavior out-ofsample. I find that the Bliss Point model generally predicts about as well as the other models. Further, it is a better predictor than the other models for up to 7% of subjects, depending on the task. This suggests that the Bliss Point model is a useful alternative to existing models.

JEL-codes: C72 C91 D64 D91 H41 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2026-10
References: Add references at CitEc
Citations:

Downloads: (external link)
https://hcapps.holycross.edu/hcs/RePEc/hcx/BP_pub_v1_2026_2.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hcx:wpaper:2601

Access Statistics for this paper

More papers in Working Papers from College of the Holy Cross, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Victor Matheson ().