Working Paper

Accounting for Context: Separating Monetary and Social Incentives

Authors

  • Andreas Bergh
  • Philipp Wichardt
Publication Date

This paper proposes a simple framework to model social preferences in a game theoretic framework which explicitly separates economic incentives from social (context) effects. It is argued that such a perspective makes it easier to analyse contextual effects. Moreover, the framework is used to exemplify both theoretically and empirically how contextual variables such as social norms can worsen a social dilemma or possibly make it disappear. The empirical results of a randomised controlled classroom experiment show that women are more responsive to such contextual effects and that social agreements can also worsen economic inefficiencies.

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Info

JEL Classification
D3, D63, Z10

Key Words

  • Context Effects
  • Efficiency
  • norms
  • preferences
  • utility