Social interactions and stability of social preferences

Humans are naturally social. We like to interact with other people, participating in group activities, exchanging ideas, and so on. But little is known about whether such social interactions change our preferences and if so, how?

In this paper, we address these questions within the context of other-regarding or social preferences. We use a modified dictator game, in which student and non-student subjects choose how much money to allocate to themselves and to an anonymous recipient from a menu of thirty allocation pairs. Then they are allowed to discuss their choices face-to-face for a given period and make individual allocation choices again.

We examine the extent to which people's social preferences change before and after face-to-face communication. We measure revealed social preferences from the observed choices, using a non-stochastic structural modeling method that preserves heterogeneity across individuals. We find that most subjects in both subject pools care about their own payoff and social welfare (the total size of the endowment), but are less concerned about equality in payoff distribution. Social interactions appear to influence student subjects' preferences more than non-students, who are older and in full-time employment.

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