Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/58523 
Year of Publication: 
2012
Series/Report no.: 
IZA Discussion Papers No. 6345
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
We compare social preference and social norm based explanations for peer effects in a three-person gift-exchange game experiment. In the experiment a principal pays a wage to each of two agents, who then make effort choices sequentially. In our baseline treatment we observe that the second agent's effort is influenced by the effort choice of the first agent, even though there are no material spillovers between agents. This peer effect is predicted by a model of distributional social preferences (Fehr-Schmidt, 1999). As we show from a norms-elicitation experiment, it is also consistent with social norms compliance. A conditional logit investigation of the explanatory power of payoff inequality and elicited norms finds that the second agent's effort can be best explained by the social preferences model. In further treatments with modified games we find that the presence/strength of peer effects changes as predicted by the social preferences model. As with the baseline treatment, a conditional logit analysis favors an explanation based on social preferences, rather than social norms following for these treatments. Our results suggest that, in our context, the social preferences model provides a parsimonious explanation for the observed peer effect.
Subjects: 
peer effects
social influence
gift-exchange
experiment
social preferences
inequity aversion
measuring social norms
JEL: 
A13
C92
D03
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

Files in This Item:
File
Size
908.88 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.