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Title:Actions and beliefs: estimating distribution-based preferences using a large scale experiment with probability questions on expectations PDF Logo
Authors:Bellemare, Charles
Kröger, Sabine
van Soest, Arthur
Issue Date:2005
Series/Report no.:IZA Discussion Papers 1666
Abstract:We combine the choice data of proposers and responders in the ultimatum game, their expectations elicited in the form of subjective probability questions, and the choice data of proposers (dictators) in a dictator game to estimate a structural model of decision making under uncertainty. We use a large and representative sample of subjects drawn from the Dutch population. Our results indicate that there is considerable heterogeneity in preferences for equity in the population. Changes in preferences have an important impact on decisions of dictators in the dictator game and responders in the ultimatum game, but a smaller impact on decisions of proposers in the ultimatum game, a result due to proposer's subjective expectations about responders' decisions. The model which uses subjective data on expectations has better predictive power and lower noise level than a model which assumes that players have rational expectations.
Subjects:ultimatum game
inequity aversion
subjective expectations
JEL:C93
D63
D84
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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