References for Sobel’S Lectures

Home , Armin Falk, Douglas Bernheim, Stanley Reiter, Uri Gneezy, Urs Fischbacher

2009 ECORE Summer School on Market Evolution and Public Decisions Annotated References for Sobel’s Lectures

References

[1] George Akerlof and Rachel Kranton. Economics and identity. Quarterly Journal of Economics, 103:715– 753, 2000. Description of the basic identity model. [2] Richard Alexander. The Biology of Moral Systems. Aldine de Gruyer, New York, 1987. Evolutionary origins of morality as seen by an evolutionary biologist. Quite consistent with economic modeling.

[3] James Andreoni and B. Douglas Bernheim. Social image and the 50-50 norm: A theoretical and experimental analysis of audience eﬀects. Technical report, UCSD, Stanford University, and NBER, August 18, 2007 2007. Ultimatum game outcomes depend on what third-parties observe – theory and experimental evidence.

[4] Roland Bénabou and Jean Tirole. Intrinsic and extrinsic motivation. Review of Economic Studies, 70:489–520, 2003. Proper incentives for agents with non-standard preferences. [5] Dan Benjamin. Social preferences and the efficiency of bilateral exchange. Technical report, Cornell Uni- versity, Novemberember 2008. Identification and efficiency in contracting models with other-regarding agents.

[6] Theodore C. Bergstrom. Evolution of social behavior: Individual and group selection. Journal of Economic Perspectives, 16:67–88, 2002. Nice exposition of group selection. [7] B. Douglas Bernheim and Antonio Rangel. Beyond Revealed Preferences: Choice Theoretic Foundations for Behavioral Welfare Economics Quarterly Journal of Economics, 124:51–104, 2009. Framework for studying welfare from revealed choices of agents with context-dependent preferences.

[8] Christopher Boehm. Egalitarian behavior and reverse dominance hierarchy. Current Anthropology, 34(3):227–240, June 1993. An anthropological discussion of group selection arguments for altruism. [9] Gary Bolton and Axel Ockenfels. ERC: A theory of equity, reciprocity and competition. American Economic Review, 90:166–193, 2000. A model of distributional preferences and supporting evidence.

[10] Samuel Bowles. Endogenous perferences: The cultural consequences of markets and other economic institutions. Journal of Economic Literature, 36:75–111, 1998. Useful survey on the evidence for preferences over outcomes that change with context. [11] Samuel Bowles and Sung-Ha Hwang. Social preferences and public economics: Mechanism design when social preferences depend on incentives. Journal of Public Economics, 92: 1811–1820, 2008. Optimal institutions depend on the nature of other-regarding preferences. [12] Samuel Bowles and Sandra Polan´ıaReyes. Economic Incentives and Social Preferences: A preference- based Lucas Critique of public policy. University of Siena, 2009. Evidence that institutions inﬂuence preferences, a taxonomy, and discussion of policy instruments. Valuable references and structured outline of evidence.

1 [13] Antonio Cabrales and Antoni Calv´o-Armengol.Interdependent preferences and segregating equilibria. Journal of Economic Theory, 139:99–113, 2008. Other-regarding preferences could segmentation in competitive labor markets. [14] Colin Camerer. Behavioral Game Theory. Princeton University Press, Princeton, 2003. Contains excel- lent surveys of experimental evidence against narrow models of rationality.

[15] Gary Charness and Matthew Rabin. Understanding social preferences with simple tests. Quarterly Journal of Economics, 117(3):817–869, August 2002. Experiments and description of a functional form that depends on outcomes and context. [16] John Conlisk. Competitive approximation of a Cournot market. Review of Economic Studies, 50:597– 607, 1983. Large Cournot markets look classical even if agents are not. [17] James C. Cox, Daniel Friedman, and Steven Gjerstad. A tractable model of reciprocity and fairness. Games and Economic Behavior, 59:17–45, 2007. A model of other-regarding preferences. [18] Martin Dufwenberg, Paul Heidhues, Georg Kirchsteiger, Frank Riedel, and Joel Sobel. The role of other-regarding preferences in competitive markets. Technical report, University of California, San Diego, 2007. General equilibrium with other-regarding preferences. [19] Martin Dufwenberg and Georg Kirchsteiger. A theory of sequential reciprocity. Games and Economic Behavior, 47(2):268–298, May 2004. A dynamic version of Rabin’s model of reciprocity. [20] Armin Falk, Ernst Fehr, and Urs Fischbacher. On the nature of fair behavior. Economic Inquiry, 41(1):20–26, 2003. Adding option changes predictions in ultimatum bargaining. [21] Armin Falk and Urs Fischbacher. A theory of reciprocity. Games and Economic Behavior, 54(2):293– 315, 2006. A dynamic model of reciprocity. [22] Armin Falk and Michael Kosfeld. The Hidden Costs of Control. American Economic Review, 96(5): 1611–30, 2006. An experimental variation on the trust game in which the principal can put a posi- tive lower bound on worker contributions. The study provides evidence that this behavior crowds out voluntary contributions. [23] Ernst Fehr, Georg Kirchsteiger, and Arno Riedl. Gift exchange and reciprocity in competitive experimental markets. European Economic Review, 42(1):1–34, 1998. Gift exchange models: theory and evidence.

[24] Ernst Fehr and Klaus Schmidt. A theory of fairness, competition, and cooperation. Quarterly Journal of Economics, 114:817–868, 1999. Introduction of the inequity aversion model and supporting theory. [25] Ernst Fehr and Klaus Schmidt. Theories of fairness and reciprocity — evidence and economic appli- cations. In Mathias Dewatripont, Lars Peter Hansen, and Stephen J. Turnovsky, editors, Advances in Economics and Econometrics: 8th World Congress, volume 1, chapter 6, pages 208–257. Cambridge University Press, 2003. Review of models of fairness and reciprocity. [26] Robert H. Frank. Passions within Reason. Norton, New York, 1988. mmutable links between the tendency to cooperate and an observable signal allow “nice” strategies to survive.

2 [27] Patricia Funk. Social Incentives and Voter Turnout: Evidence from the Swiss Mail Ballot System. Journal of the European Economic Association, forthcoming. Lowering the cost of voting may not increase participation. Evidence from a natural experiment and theory (suggesting audience effects matter). [28] John Geanakoplos, David Pearce, and Ennio Stacchetti. Psychological games and sequential rationality. Games and Ecoonomic Behavior, 1:60–79, 1989. Original model of psychological games. [29] John Geanakoplos and Herakles Polemarchakis. Pareto improving taxes. Journal of Mathematical Eco- nomics, 44(7-8):682–692, July 2008. Generic inefficiency of competitive equilibrium with consumption externalities. [30] Uri Gneezy and Aldo Rustichini. Pay Enough or Don’t Pay at All. Quarterly Journal of Economics, 115:791–810, 2000. Explicit late fees at Israeli child-care centers lead to increases in late pickups. [31] Dan K. Gode and Shyam Sunder. Allocative efficiency of markets as a partial substitute for individual rationality. Journal of Political Economy, 101:119–137, 1993. Market equilibrium is robust to some kinds of boundedly rational behavior (simulation evidence). [32] Leonid Hurwicz, Roy Radner, and Stanley Reiter. A stochastic decentralized resource allocation process: Part I. Econometrica, 43(2):187–221, March 1975. Robustness of market equilibrium. [33] Leonid Hurwicz, Roy Radner, and Stanley Reiter. A stochastic decentralized resource allocation process: Part II. Econometrica, 43(3):363–93, May 1975. [34] Emir Kamenica. Contextual Inference in Markets: On the Informational Content of Product Lines. American Economic Review, 98(5):2127–2149, December 2008. Agents with classical preferences can appear to be “irrational” in certain contexts. [35] Levent Ko¸ckesen, Efe A. Ok, and Rajiv Sethi. The strategic advantage of negatively interdependent preferences. Journal of Economic Theory, 92(2):274–299, 2000. An evolutionary model in which the ability to commit to preference for destructive reciprocity has selective advantage. [36] Edward P. Lazear, Ulrike Malmendier, and Roberto A. Weber, Roberto. Sorting in Experiments with Application to Social Preferences. Technical report, NBER, 2006. Experiments on sorting: An opt-out provision changes behavior in dictator games. [37] David Levine. Modelling altruism and spitefulness in game experiments. Review of Economic Dynamics, 1:593–622, 1998. [36] Levine’s model of other-regarding preferences in which altruistic weights depend on the perceived altruism of others. (You value the consumption of an agent more highly the greater the agent’s altruism.) [38] Fabio Maccheroni, Massimo Marinacci, and Aldo Rustichinic. Social decision theory: Choosing within and between groups. Technical report, University of Minnesota, July 2008. Axiomatic model of choice with status concerns. [39] George Price. Selection and covariance. Nature, 227:520–521, 1970. Seminal statement of sufficient conditions for group selection. [40] Matthew Rabin. Incorporating fairness into game theory and economics. American Economic Review, 83(5):1281–1302, December 1993. Important model incorporating preferences for reciprocity.

3 [41] Arthur J. Robson. Eﬃciency in evolutionary games: Darwin, nash and the secret handshake. Journal of Theoretical Biology, 144:379–396, 1990. A version of the “green beard” argument in an economic context. [42] Alvin E. Roth. Bargaining experiments. In John Kagel and Alvin Roth, editors, Handbook of Exper- imental Economics, pages 253–348. Princeton University Press, Princeton, 1995. Survey of bargaining experiments. [43] Uzi Segal and Joel Sobel. Tit for tat: Foundations of preferences for reciprocity in strategic settings. Journal of Economic Theory, 136(1):197–216, September 2007. Axiomatic Derivation of Preferences for Reciprocity in Games.

[44] Elman R. Service. The Hunters. Prentice-Hall, Englewood Cliffs, New Jersey, 1966. Reciprocity from the point of view of anthropologists. [45] Rajiv Sethi and E. Somanathan. Understanding reciprocity. Journal of Economic Behavior and Orga- nization, 50:1–27, 2003. A review of evolutionary models of other-regarding preferences. [46] Joel Sobel. Interdependent preferences and reciprocity. Journal of Economic Literature, 43(2):396–440, June 2005. Survey of models of other-regarding preferences. [47] Joel Sobel. Other-regarding preferences in markets. Technical report, UCSD, April 2008. Conditions under which equilibria in call markets with general preferences and competitive. [48] Elliott Sober and David Wilson. Unto Others: The Evolution and Psychology of Unselfish Behav- ior. Harvard University Press, Cambridge, 1998. A serious discussion of altruism from biological and philosophical points of view. [49] George Stigler and Gary Becker. De gustibus non est disputandum. American Economic Review, 67:76–90, 1977. Definitive statement of the “Chicago School” of preferences. [50] Guido Tabellini. The scope of cooperation: Values and incentives. Quarterly Journal of Economics, 123(3):905–950, August 2008. Institutions may induce cooperative behavior. [51] Richard Titmuss. The Gift Relationship: From Human Blood to Social Policy. Pantheon Books, New York, 1971. A controversial (to economists) statement of the crowding out hypothesis as applied to blood donations.

[52] Robert L. Trivers. The evolution of reciprocal altruism. Quarterly Review of Biology, 46:35–58, March 1971. The original paper on reciprocal altruism. (Trivers is a biologist, but the article is accessible to us.)