Accounting for context: Separating monetary and social incentives

Andreas Bergh and Philipp Wichardt

No 1971, Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: 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.

Keywords: Context Effects; Efficiency; Social Norms; Social Preferences; Utility (search for similar items in EconPapers)
JEL-codes: D03 D63 Z10 (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:1971

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