Publications
Publications
- December 2010
- American Economic Review
Social Preferences and Strategic Uncertainty: An Experiment on Markets and Contracts
Abstract
This paper reports a three-phase experiment on a stylized labor market. In the first two phases, agents face simple games, which we use to estimate subjects' social and reciprocity concerns. In the last phase, four principals compete by offering agents a contract from a fixed menu. Then, agents "choose to work" for a principal by selecting one of the available contracts. We find that i) (heterogeneous) social preferences are significant determinants of choices, ii) for both principals and agents, strategic uncertainty aversion is a stronger determinant of choices than fairness, and iii) agents display a marked propensity to work for principals with similar distributional concerns.
Keywords
Citation
Cabrales, Antonio, Raffaele Miniaci, Marco Piovesan, and Giovanni Ponti. "Social Preferences and Strategic Uncertainty: An Experiment on Markets and Contracts." American Economic Review 100, no. 5 (December 2010): 2261–2278.