"Research on social preferences has been a flourishing area of investigation and a major contributor to the success of behavioural economics. Michalis Drouvelis’ marvellous book provides the reader with a fantastic and eminently readable introduction into this fascinating research to which he has also made many important contributions himself. Highly recommended for anyone interested in human social behaviour." – Simon Gächter, Professor of Psychology of Economic Decision Making, University of Nottingham
“A very exciting book on the mysteries of social preferences and human sociality. The book allows students to view the inside of what makes economic experiments on social interactions so inspiring and thought-provoking.” – Marie Claire Villeval, Research Professor in Economics, Centre national de la recherche scientifique, Paris
"A true tour de force treatment of lab experiments that measure social preferences. This convivial tome is a must for any student, researcher, and policy-maker interested in other regarding preferences." – John List, Kenneth C. Griffin Distinguished Service Professor of Economics, University of Chicago
“A very accessible and valuable introduction into behavioural and experimental economic research with a focus on social preferences; nicely written, the book is ideally suited to form the basis for a course.” – Michael Kosfeld, Director, Frankfurt Laboratory for Experimental Economic Research, Goethe University Frankfurt
"As economists, we have a hard time understanding and modeling social behavior. In this book, Drouvelis does an outstanding job at presenting the empirical evidence in a clear and comprehensive way. I enjoyed reading his take on the literature, and believe this will be an important book for everyone who wants to understand the way economists think about social preferences." – Uri Gneezy, Epstein/Atkinson Endowed Chair in Behavioral Economics, University of California San Diego
"If you are looking for an easily accessible and clearly written introduction into the experimental economics literature on social preferences, you will enjoy reading this book. The well-picked selection of seminal contributions in this multifaceted field provides an ideal starting point for anyone interested in embarking on research on social preferences and is a valuable source also for experts in the field. The combination of an insightful overview with the detailed exposition of selected research and with methodological and practical guidance makes this book novel and precious." – Bettina Rockenbach, Professor of Economics, University of Cologne
"If you are interested in social preferences and how to study them with the tools from experimental economics, this is a must read! Covering the main economic games on this, Michalis Drouvelis has written a very inspiring and informative textbook that will help not only economists but all researchers interested in these questions." – Anna Dreber, Professor of Economics, Stockholm School of Economics
This introduction to one of the key areas of behavioural economics – social preferences – explains in clear, nontechnical language how particular groups of experiments have been used by behavioural economists to shed light on the processes of economic decision making. These include bargaining games, trust games and public good games. The significance of determinants such as punishment, sanctioning, emotion, cooperation, reciprocity, leadership, framing and cross-cultural differences are demonstrated and explained, and students are provided with the understanding and resources needed to replicate the experiments themselves.
1. Introduction 1.1 Homo economicus 1.2 Behavioural and experimental economics 1.3 Deception and monetary incentives
2. Bargaining games 2.1 Introduction 2.2 Dictator games 2.3 Competition from proposers’ and responders’ side 2.4 Psychological factors 2.5 Financial factors
3. Trust and gift exchange games 3.1 Introduction 3.2 Disentangling motives in the trust game 3.3 Behavioural determinants of trust 3.4 Gift exchange games
4. Public Good Games I 4.1 Introduction 4.2 Do people cooperate? 4.3 Why do people cooperate? 4.4 Conditional cooperation
5. Public Good Games II 5.1 Introduction 5.2 Can pre-play communication promote pro-social outcomes? 5.3 Income inequality and pubic good provision 5.4 Social identity and discrimination in public good experiments
6. Leadership 6.1 Introduction 6.2 Sequential vs simultaneous public good games 6.3 Leader appointment 6.4 Who leads more effectively?
7. Public good games with sanctioning I 7.1 Introduction 7.2 The role of emotions 7.3 Sanctioning mechanisms 7.4 Does the presence of monetary sanctions always promote cooperation?
8. Public good games with sanctioning II 8.1 Introduction 8.2 Voting on public good institutions with punishment and rewards 8.3 Voting on formal sanctions 8.4 Third-party punishment games 8.5 Factors determining the assignment of third-party sanctions
9. Cross-cultural experiments 9.1 Introduction 9.2 Fairness and bargaining behaviour 9.3 Trust games 9.4 Cooperative behaviour 9.5 Negative reciprocity
Appendix A Experimental instructions Appendix B Glossary
Michalis Drouvelis is Professor of Behavioural Economics at the University of Birmingham.