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„Selfish in the end?“ An investigation of consistency and stability of individual behavior

„Selfish in the end?“ An investigation of consistency and stability of individual behavior. Jeannette Brosig*, Thomas Riechmann, Joachim Weimann *University of Cologne / University of Magdeburg. We have a lot of behavioral anomalies observed in the labs. (cooperation, gift giving …)

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„Selfish in the end?“ An investigation of consistency and stability of individual behavior

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  1. „Selfish in the end?“An investigation of consistency and stabilityof individual behavior Jeannette Brosig*, Thomas Riechmann, Joachim Weimann *University of Cologne / University of Magdeburg

  2. We have a lot of behavioral anomalies observed in the labs. (cooperation, gift giving …) • And we have non-standard theories trying to explain these anomalies. (reciprocity, social preferences …)

  3. How to test these theories? We make use of the following: • All none standard theories have in common: • They stick to the assumption that subjects behave rational. • They assume some kind of “other regarding preferences”. • This implies that all theories assume • that individuals behave consistently with respect to these preferences. • that their behavior is stable over time (in identical situations they will decide identically). Testing the consistency and stability of individual decisions therefore puts the non-standard theories to the experimental test!

  4. The tested theories • We define consistency of individual behavior with respect to: • Standard theory • Payoff maximization • Fehr/Schmidt and Charness/Rabin • Not identical in general, but make identical predictions for our games. • Inequality aversion matters • Andreoni/Miller • Own payoff and payoff of others are “normal goods”.

  5. Our Games • Two modified dictator games • Take game: • two players are endowed with € 5.00 each • player A (the dictator) can “take” money from player B (€ x) • his own payoff increases by m x • four treatments with m equal to 2; 1.5; 1; 0.5 • Give games • player A can “give” money to player B (€ x ) • B’s payoff increases by m x • four treatments with m equal to 2; 1.5; 1; 0.5

  6. TAKE GIVE

  7. Sequential prisoners dilemma game(strategy method)

  8. Setup of the experiment • All ten games were played in two sessions at two subsequent days. • These two sessions were repeated twice with the same subjects (3 waves). • Between two waves there was a period of one month. • In all three waves, subjects were confronted with exactly the same games, but they played with different partners (players B). • Players B were newly recruited for each wave. • Partners were randomly matched within a session (perfect stranger design). • Only at the start of the third wave subjects were informed about the sequence of the games • The sequence was the same in all waves. • All experiments were double blind.

  9. Consistency and stability • Within game consistency • Do subjects behave consistently in the • four Take games, • four Give games and the • two PD games?

  10. Consistency within games

  11. Across game consistency • Is the behavior consistent in all three classes of games? • Stability • Is behavior stable over time, i.e. do subjects behave identically in identical games?

  12. Results Aggregate behavior in Take and Give games Wave 1 Wave 2 Wave 3

  13. Aggregate behavior in PD games D moves after a D move D moves after a C move Wave 1 Wave 2 Wave 3

  14. Consistency rates within games • In Take and Give: Selfishness is a special case of FS/CR and A/M • The increase of consistency is almost always due to the fact that, over time, more and more subjects make consistently selfish decisions • In wave 3, about ¼ of all subjects behave inconsistently in the PD game.

  15. Consistency across games • In the first two waves, subjects (sometimes) deviate from selfish behavior. • In wave 3, nearly 60% stick to their consistently selfish behavior in all games.

  16. Stability of behavior over all waves

  17. Every stable behavior is strictly selfish. We could not find any subject displaying stable, non-selfish preferences

  18. Discussion • Wave 1 reproduces the well known results. • But subjects change their behavior over time: • All changes of behavior are in the same direction. • They become more and more selfish. • Thus: What is the relevant experimental evidence? • “inexperienced” behavior in wave 1 or more “mature” behavior in wave 3? • What do we learn from our experiment, • that subjects have “other regarding preferences” or • that “social preferences” are not that important in anonymous situations?

  19. Thank you!

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