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Purpose: This study aims to analyze the effect of cognitive load and social value orientation on managers' preferences when they face with two types of restructuring choices in financially distressed firms: the first belonging to the family of organizational restructuring (massive layoffs) and the second to the family of financial restructuring (debt increases). Design/methodology/approach: The authors investigate experimentally the impact of managers' cognitive load and social value orientation on the decision to restructure leveraged buyout (LBO) firms in financial distress by using either massive layoffs or debt increases. Findings: By investigating the impact of managers' cognitive load and social value orientation on the restructuring decision of an LBO firm in financial distress, the research reveals that, on average, cognitively loaded managers prefer massive layoffs over increased debt levels. The massive layoffs seemingly provide a relatively easier way to avoid conflict with influential, residual claimants. In contrast, social value–oriented managers actively avoid massive layoffs and prefer to increase debt. Research limitations/implications: These results imply that the performance mechanisms emphasized to improve agency relations, for example, in LBOs, have their own limitations during periods of financial distress. This study shows that one of these limits is related to cognitive distortions and personality traits. Originality/value: In this research, the originality lies in understanding how managers' internal factors affect their restructuring decision-making, in the case of LBO firms in financial distress. [ABSTRACT FROM AUTHOR]

Rising inequality has brought redistribution back on the political agenda. In theory, inequality aversion drives people's support for redistribution. People can dislike both advantageous inequality (comparison relative to those worse off) and disadvantageous inequality (comparison relative to those better off). Existing experimental evidence reveals substantial variation across people in these preferences. However, evidence is scarce on the broader role of these two distinct forms of inequality aversion for redistribution in society. We provide evidence by exploiting a unique combination of data. We use an incentivized experiment to measure inequality aversion in a large population sample (~9,000 among 20-to 64-y-old Danes). We link the elicited inequality aversion to survey information on individuals' support for public redistribution (policies that reduce income differences) and administrative records revealing their private redistribution (real-life donations to charity). In addition, the link to administrative data enables us to include a large battery of controls in the empirical analysis. Theory predicts that support for public redistribution increases with both types of inequality aversion, while private redistribution should increase with advantageous inequality aversion, but decrease with disadvantageous inequality aversion. A strong dislike for disadvantageous inequality makes people willing to sacrifice own income to reduce the income of people who are better off, thereby reducing the distance to people with more income than themselves. Public redistribution schemes achieve this but private donations to charity do not. Our empirical results provide strong support for these predictions and with quantitatively large effects compared to other predictors. [ABSTRACT FROM AUTHOR]

This paper extends the literature on structural estimation of social preferences to account for the desire to adhere to social norms and hide one's true intentions via moral wiggle room. We conduct an experiment to test whether accounting for normatively appropriate behavior allows us to distinguish between preference types who care about outcomes versus adhering to social norms and whether the introduction of moral wiggle room undermines the stability of social preference estimates. We find that social preference estimates are remarkably robust to the inclusion of moral wiggle room. However, the representative agent is strongly motivated by norms and failing to account for this motive in our model causes us to overestimate how much agents care about helping those who are worse off. Using finite mixture models to endogenously identify latent preference types, we replicate previous work finding that the majority of subjects can be classified as strong or moderate altruists when normative concerns are not considered. Accounting for the normative appropriateness of decisions when categorizing participants, however, reveals different motives across types: strong altruists are only marginally concerned with norms while the moderate altruists are highly sensitive to them and, once norms are taken into account, don't care at all about the outcomes of others. Our results thus recast the prior findings in a new light. Rather than the two most common types being strong altruists and moderate altruists, we find that they are better described as strong altruists and norm followers. [ABSTRACT FROM AUTHOR]

A central question in social cognitive development concerns the degree to which children prefer social ingroup members relative to social outgroup members. Forced‐choice measures and continuous rating scales are often used to assess these preferences, but little work has examined the extent to which these two methods yield similar or divergent estimates. In Study 1, we used a within‐subjects design to assess gender‐, race‐, and accent‐based preferences in 5–6‐year‐old predominantly white children (N = 100) with both a forced‐choice and a rating measure (on a 1–6 scale); replicating prior work, children expressed ingroup preference along all three dimensions regardless of how they were assessed. In Study 2, we replicated the discrepancy between forced‐choice and rating in children's ingroup gender preferences in a more racially diverse sample (N = 55). In both studies, while responses on forced‐choice and rating measures were correlated, estimates of ingroup preference were stronger in each domain when assessed with a forced‐choice measure. We discuss the implications for researchers who wish to assess social group preferences. [ABSTRACT FROM AUTHOR]

Recent evidence suggests that a person's reciprocity toward others depends on the amount of sacrifice made by others. We develop a reciprocity model that incorporates the concept of sacrifice, defined as the payoff forgone when choosing an action. Our model retains many desirable properties of the existing reciprocity models, while capturing the nuanced psychology of reciprocity. In our model, one's motivation to reciprocate increases in the size of others' sacrifice. In two-person games, it can be shown that our model strengthens reciprocity motivation in reciprocity equilibria that are not Nash equilibria under selfish preferences. [ABSTRACT FROM AUTHOR]

We explore mechanism design with outcome‐based social preferences. Agents' social preferences and private payoffs are all subject to asymmetric information. We assume quasi‐linear utility and independent types. We show how the asymmetry of information about agents' social preferences can be operationalized to satisfy agents' participation constraints. Our main result is a possibility result for groups of at least three agents: Any such group can resolve any given allocation problem with an ex post budget‐balanced mechanism that is Bayesian incentive‐compatible, interim individually rational, and ex post Pareto‐efficient. [ABSTRACT FROM AUTHOR]

We propose that a person's desire to consume an object or possess an attribute increases in how much others want but cannot have it. We term this motive imitative superiority-seeking and show that it generates preferences for exclusion that help explain a host of market anomalies and make novel predictions in a variety of domains. In bilateral exchange, trade becomes more zero-sum, leading to an endowment effect. People's value of consuming a good increases in its scarcity, which generates a motive for firms and organizations to engage in exclusionary policies. A monopolist producing at constant marginal cost can increase profits by randomly excluding buyers relative to the standard optimal mechanism of posting a common price. In the context of auctions, a seller can extract greater revenues by randomly barring a subset of consumers from bidding. Moreover, such non-price-based exclusion leads to higher revenues than the classic optimal sales mechanism. A series of experiments provides direct support for these predictions. In basic exchange, a person's willingness to pay for a good increases as more people are explicitly barred from the opportunity to acquire it. In auctions, randomly excluding people from the opportunity to bid substantially increases bids amongst those who retain this option. Consistent with our predictions, exclusion leads to bigger gains in expected revenue than increasing competition through inclusion. Our model of superiority-seeking generates "Veblen effects," rationalizes attitudes against redistribution and provides a novel motive for social exclusion and discrimination. [ABSTRACT FROM AUTHOR]

Spoken language conveys rich sociolinguistic information about a speaker's language background. Previous research indicates that both monolingual and bilingual children use this information when making social decisions. They prefer local speakers whose accent or variety matches their own over speakers of foreign languages or second-language speakers. What remains unclear is how exposure to diverse linguistic communities affects children's preferences for non-local accents. This study examines social preferences for a regional and a second-language accent as a function of prior exposure to diverse accents and languages, measured on a continuous scale. German-speaking primary-school children (aged 7–10) were asked to choose stickers in a forced-choice task using animated cartoon characters. We replicated the observed social preferences for one's local accent. Interestingly, when the local accent was absent, children socially preferred a second-language accent (American) over a first-language regional accent (Bavarian), even though both accents were equally intelligible and relatively unfamiliar to the children, as determined through a sentence repetition task and a geographical classification task. Children's choices were not explained by continuous measures of accent or bilingual exposure. The results suggest a complex interaction of various factors not limited to the speakers' first- or second-language status. [ABSTRACT FROM AUTHOR]

Adequate financial decision-making necessitates a solid foundation in financial literacy and comprehension of its principles. This is particularly crucial for students, as their financial and behavioral choices can significantly impact their future financial and career prospects. Consequently, the present study aimed to explore the causal links between economics education, financial literacy, decision-making abilities, and entrepreneurial intentions. Employing a descriptive-correlational approach, the researchers utilized structural equation modeling, drawing on a sample of 375 individuals purposefully selected from a population of 11,345 students at Urmia University. Data were collected through a questionnaire, and the research variables were initially assessed using multiple correspondence analysis. Subsequently, the research model was estimated. The findings revealed a positive and substantial impact of economics education on students' financial literacy and the influence of economics education on decision-making skills and entrepreneurial intentions through the mediating factor of financial literacy. Furthermore, the results confirmed the moderating role of socioeconomic status in the relationship between economics education and financial literacy. Consequently, the study's outcomes can inform educational institutions and policymakers, supporting the implementation of policies aimed at enhancing general economic education and emphasizing the equitable and distributive nature of such initiatives.

Over 45,000 gun deaths occur annually in the United States, a country with more than 100 million gun owners and more than 350 million guns. Nevertheless, passing legislation to reduce gun violence is difficult because the issue is intensely polarized. Polls asking about general gun policies (e.g., AR-15 restrictions) demonstrate that, at least in the abstract, Americans disagree vehemently about whether civilians should be able to keep and bear arms. It is possible, however, that a hidden consensus exists in America, which has thus far escaped attention--specifically, that when the focus is on their immediate environments and daily lives, even traditionally pro-gun groups may exhibit aversion to certain types of gun ownership and storage practices. To test this, we conducted two preregistered survey experiments with a large national sample. The first was a conjoint analysis where respondents chose between neighbors (n = 33,596 choices) who randomly varied on seven attributes, including gun ownership (none, pistol, AR-15). No group of respondents, not even traditionally pro-gun groups (e.g., Republicans), exhibited a significant preference for living near gun owners, and every group was averse to AR-15-owning neighbors. The second experiment, per debates about safe-storage laws, was a picture-based factorial vignette that randomized a neighbor's gun storage practices (n = 2,098). Every group of respondents was averse to interacting with a neighbor who stored guns outside of a locked safe. Our findings demonstrate that there is widespread agreement that certain types of gun ownership and storage practices are undesirable for communities. [ABSTRACT FROM AUTHOR]

Using a unique panel dataset on air pollution and car sales from thirty major cities in China across three years, we estimate the impact of air pollution on the adoption of hybrid and electric vehicles. To identify the causal effect, we use three sets of interactive fixed effects to control for a large group of potential confounders and an instrument for the air pollution variable. Our results show that worse air quality leads consumers to purchase more hybrid and electric cars, and the effect is larger in cities with higher incomes. These findings are consistent with predictions from the social preferences theory and point out new directions for strategies to promote the adoption of hybrid and electric cars. [ABSTRACT FROM AUTHOR]

Experimental studies in the literature have shown that individuals are willing to sacrifice their own resources to punish free-riders even if there is no possibility to get reward for this behavior. The aim of the current study is to examine whether individuals have preferences to punish violators when the punishment is costly for themselves and to test whether this preference is affected by social categorization (i.e., ingroup-outgroup settings). For these aims we conducted two experiments. In both studies the Third-Party Punishment Game was used. Study 1 in which a 2 (distributor's identity: ingroup vs. outgroup) x 2 (recipient's identity: ingroup vs. outgroup) x 2 (fairness: equal vs. unequal) within-subjects design was used consists of 38 participants and Study 2 in which a mixed design was used consists of 174 participants. It was found in both studies that participants spent higher amounts to punish unfair players than fair players. Additionally, in Study 2 participants were found to prefer to altruistically punish the perpetrator more harshly when the victim was an ingroup member. The findings suggest that individuals attempt to maintain cooperative behavior norms by engaging in costly punishment of selfish individuals, regardless of their group membership. However, the stricter reactions to unfairness directed to an ingroup member show that participants favor ingroup members over outgroup members in line with the social identity literature. [ABSTRACT FROM AUTHOR]

Some scholars find that behavioral variation in the public goods game is explained by variations in participants' understanding of how to maximize payoff and that confusion leads to cooperation. Their findings lead them to question the common assumption in behavioral economics experiments that choices reflect motivations. We conduct two experiments, in which we minimize confusion by providing participants with increased training. We also introduce a question that specifically assesses participants' understanding of payoff maximization choices. Our experimental results show that the distribution of behavior types is significantly different when participants play with computers versus humans. A significant increase in contributions is also observed when participants play with humans compared to when they play with computers. Moreover, social norms may be the main motive for contributions when playing with computers. Our findings suggest that social preferences, rather than confusion, play a crucial role in determining contributions in public goods games when playing with humans. We therefore argue that the assumption in behavioral economics experiments that choices reveal motivations is indeed valid. [ABSTRACT FROM AUTHOR]

This paper studies how individuals consider other individuals' preferences when selecting whom to include in a group or network in the absence of any personal taste or statistical reason associated with the inclusion of a particular applicant. This type of decision emerges, for instance, when unprejudiced white landlords discriminate against black applicants because of the prejudice of existing white tenants, or when employers hire an employee-referred candidate instead of an outsider who is disfavored by current employees. We investigate the potential causes as to why selectors consider the group composition preferences of other group members. First, selectors have altruistic feelings toward them and select their preferred candidates. Second, selectors anticipate that their cooperativeness depends on who will be included and so strategically select candidates who are preferred by current group members. We investigate the reasons for this type of discrimination in an experiment in which we allow for endogenous group formation and show that discriminatory behavior in embedded contexts emerges even when selectors have no taste for any candidate nor any reason to discriminate statistically, but still discriminate in favor of a current group member's preferred candidate both for altruistic and strategic reasons. We thereby identify a new major source for discrimination and for the perpetuation of systematic exclusion of outsiders disfavored by insiders, even when the latter do not participate in the decision of whom to include. We discuss the implications for policies aimed at overcoming strategic discrimination in hiring decisions, employee referral programs, quotas, and bonus payments. [ABSTRACT FROM AUTHOR]

There is some evidence that people who grew up in economic hard times more strongly favor government redistribution and are more compassionate towards the poor. We investigate how inclusive this increase in compassion is by studying how macroeconomic conditions experienced during young adulthood affect immigration attitudes. Using US and global data, we show that experiencing bad macroeconomic circumstances strengthen anti-immigration attitudes for life. Moreover, we find that people become generally more outgroup hostile. Our results thus suggest that the underlying motive for more government redistribution is not a universal increase in compassion, but more self-interested and restricted to one's ingroup. [ABSTRACT FROM AUTHOR]

Beyond the direct destructive nature of war, conflict may also impact social preferences, norms, and risk-taking behavior. This paper examines the enduring impact of conflict on preferences and behavior by studying different versions of public goods games conducted nearly two decades after the Rwandan genocide, leveraging variation in radio reception among villages in 1994, which determined exposure to hate-propaganda messages inciting conflict. Results indicate that communities exposed to greater violence exhibit increased cooperation, active punishment, and risk-taking. Exploiting the heterogeneity in participants' ages of conflict experience, enhanced cooperation is entirely driven by those who were children during the genocide, while norm enforcement through punishment and reward is more prominent among older individuals. Risk-taking increases are observed across all age groups. The results allow for a reassessment of previous research and highlight the psychological imprint of conflict exposure in line with the literature on early childhood development. [ABSTRACT FROM AUTHOR]

In dyadic ultimatum bargaining proposers, who are privately informed about the pie size, can exploit their "moral wiggle room" by engaging in unfairness which is unobservable by responders. Our setup instead assumes better informed responders and, as a consequence, limits ultimatum power and questions conflict resolution via acceptance of ultimatum proposals. In addition to testing the game theoretic solution, based on common opportunism, we assess whether two different market framings boost benchmark behavior. Our results confirm nearly universal responder opportunism. Although the benchmark proposer demand is modal, proposer choices display substantial variation, even in later rounds and even in the range in which lower demands would let both parties expect to earn more. Nevertheless, such inefficiently large demands become less frequent across rounds. Our results also show that market framing is insignificant and more so in later rounds. [ABSTRACT FROM AUTHOR]

Do people have well-defined social preferences waiting to be applied when making decisions? Or do they have to construct social decisions on the spot? If the latter, how are those decisions influenced by the way in which information is acquired and evaluated? These temporal dynamics are fundamental to understanding how people trade off selfishness and prosociality in organizations and societies. Here, we investigate how the temporal dynamics of the choice process shape social decisions in three studies using response times and mouse tracking. In the first study, participants made binary decisions in mini-dictator games with and without time constraints. Using mouse trajectories and a starting time drift diffusion model, we find that, regardless of time constraints, selfish participants were delayed in processing others' payoffs, whereas the opposite was true for prosocial participants. The independent mouse trajectory and computational modeling analyses identified consistent measures of the delay between considering one's own and others' payoffs (self-onset delay, SOD). This measure correlated with individual differences in prosociality and predicted heterogeneous effects of time constraints on preferences. We confirmed these results in two additional studies, one a purely behavioral study in which participants made decisions by pressing computer keys, and the other a replication of the mouse-tracking study. Together, these results indicate that people preferentially process either self or others' payoffs early in the choice process. The intrachoice dynamics are crucial in shaping social preferences and might be manipulated via nudge policies (e.g., manipulating the display order or saliency of self and others' outcomes) for behavior in managerial or other contexts. This paper was accepted by Yan Chen, behavioral economics and decisions analysis. Funding: F. Chen acknowledges support from the National Natural Science Foundation of China [Grants 71803174 and 72173113]. Z. Zhu acknowledges support from the Ministry of Science and Technology [Grant STI 2030-Major Projects 2021ZD0200409]. Q. Shen acknowledges support from the National Natural Science Foundation of China [Grants 71971199 and 71942004]. I. Krajbich acknowledges support from the U.S. National Science Foundation [Grant 2148982]. This work was also supported by the James McKeen Cattell Fund. Supplemental Material: The online appendix and data are available at https://doi.org/10.1287/mnsc.2023.4732. [ABSTRACT FROM AUTHOR]

This study examines the correlates of environmental attitudes among Europeans and focuses on the roles of volunteering and practicing sports in a voluntary sports club. Drawing on the literature on social preferences, it argues that altruism and generosity are characteristics that apply to both leisure activities, while also shaping environmental attitudes. The empirical analysis uses data from the European Values Survey (2017–2019; n = 34,296). Environmental attitudes are captured by a composite index and a trade-off question assessing individuals' preferences for environmental protection versus economic growth. The results of regression analyses show that volunteering and sports club membership have a significant positive association with the environmental attitude measures. Furthermore, both activities attenuate the negative associations of socio-demographic characteristics, including male gender, lower and medium education, retirement, being in a partnership, and living in a small town. Environmental policy should consider the spillover effects of leisure activities on individuals' environmental attitudes. [ABSTRACT FROM AUTHOR]

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Exhibiting altruism toward and cooperativeness with others is a key ingredient for successful work relationships and managerial decision making. Rising political polarization creates a hazard because it ruptures this fabric and impedes the interaction of employees, especially across political isles. This paper's focus is to examine various behavioral-, belief-, and norm-based layers of (non)strategic decision making that are plausibly affected by polarization. I quantify this phenomenon via five preregistered studies in the context of Donald J. Trump, comprising 15 well-powered behavioral experiments and a diverse set of over 8,600 participants. To capture the pervasiveness of polarization, I contrast the findings with various political and nonpolitical identities. Overall, I consistently document strong heterogeneous effects: ingroup-love occurs in the perceptional domain (how close one feels toward others), whereas outgroup-hate occurs in the behavioral domain (how one helps/harms/cooperates with others). The rich setting also enables me to examine the mechanisms of observed intergroup conflict, which can be attributed to one's grim expectations regarding cooperativeness of the opposing faction, rather than one's actual unwillingness to cooperate. For the first time, the paper also tests whether popular behavioral interventions (defaults and norm-nudges) can reduce the detrimental impact of polarization in the contexts studied here. The tested interventions improve prosociality but are ineffective in closing the polarization gap. This paper was accepted by Yan Chen, behavioral economics and decision analysis. Funding: This work was supported by Deutsche Forschungsgemeinschaft [Grant EXC 2126/1– 390838866]. Supplemental Material: Data and the online appendix are available at https://doi.org/10.1287/mnsc.2023.4701. [ABSTRACT FROM AUTHOR]

It is widely held that studying economics makes you more selfish and politically conservative. We use a difference‐in‐differences strategy to disentangle the causal impact of economics education from selection effects. We estimate the effect of four different intermediate microeconomics courses on students' experimentally elicited social preferences and beliefs about others, and policy opinions. We find no discernible effect of studying economics (whatever the course content) on self‐interest or beliefs about others' self‐interest. Results on policy preferences also point to little effect, except that economics may make students somewhat less opposed to highly restrictive immigration policies. [ABSTRACT FROM AUTHOR]

Introduction: How people attach value to the outcomes of self and other—social preferences—is central to social behavior. Recently, how dispositional and state emotion shape such social preferences has received researchers' attention.Method: The present investigation asked whether and to what extent dispositional and state compassion predict shifts in social preferences across 4 samples: two correlational samples (final ns 153 & 368, study 1a and 1b) and two experimental samples (final ns: 430 & 530, studies 2 and 3).Results: In keeping with recent accounts of compassion, dispositional compassion predicted general preference for equality, expressed as dispreference for both monetary advantage over another (interaction βs = −0.36, −0.33, −0.25, −0.22; all p < 0.001) and monetary disadvantage relative to others (βs: 0.26, 0.27, 0.28, 0.17; all p < 0.01; positive coefficients imply dispreference). This dispositional effect persisted when controlling for prosociality, positivity, agreeableness, and respectfulness. Furthermore, these dispositional compassion effects were relatively unchanged by experimental emotion inductions in studies 3 and 4. The experimental inductions of state compassion and state pride showed little evidence of systematic effects on social preferences relative to each other or a neutral condition.Discussion: Discussion focused on individual differences in emotion and social preferences. [ABSTRACT FROM AUTHOR]

We study possible labor market discrimination by workers towards their out-group employers as manifested via social preferences (altruism and reciprocity). We run a well-powered, model-based, lab-in-the-field experiment, recruiting 6,000 white American worker subjects from Amazon's M-Turk platform for a real-effort task. We also hire trainer subjects, our stand-in for employers, from a university. To worker subjects, we randomly (and unobtrusively) reveal the racial identity of the trainers, who may be white or black. We find evidence that white workers may discriminate against white employers based on altruism (working harder due to concern for the employer's well-being). However, they may discriminate in favor of their white employers based on reciprocity (working harder because of a small gift). From the perspective of black (white) employers, altruism evokes a stronger (weaker) effort response, but gift-giving has no (positive) effect. Taken together, the combined effect of altruism and reciprocity on worker effort is the same for black and white employers. [ABSTRACT FROM AUTHOR]

Children have a robust social preference for people similar to them, like those who share their language, accent, and race. In the present research, we show that this preference can diminish when children consider who they want to learn about. Across three experiments, 4- to 6-year-olds (total N = 160; 74 female, 86 male, from the Waterloo region in Canada, a predominantly White and middle-class region) and adults (N = 103) saw pairs of characters. One character was from nearby and had characteristics typical of the participating child's location (e.g., playing soccer), whereas the other character was from far away and had characteristics atypical of children's location (e.g., playing hurling). In Experiment 1, children had no preference when judging who they liked better, but preferred foreign characters when judging who they wanted to learn about. Experiments 2 and 3 followed up by using procedures where participants were not told anything about the characters besides whether they were local or foreign. Children and adults preferred local characters when choosing who they liked, but preferred local characters less when choosing who to learn about. These findings show that children's preferences for similar others are flexible and depend on the judgment they are making. Public Significance Statement: Similarity is a potent force in children's social preferences. Although there are exceptions, children typically like and trust people who are similar to them, compared with people who are dissimilar. We show that these preferences diminish in children's curiosity about others. That is, children do not strongly prefer similar others when assessing who to learn about. This shows that children's similarity-based preferences are flexible and may have a rational basis. [ABSTRACT FROM AUTHOR]

This survey article provides an overview of the recent experimental economic literature on fairness‐related behaviors in children and adolescents. We discuss different motives underlying fair behavior, summarize the development of fairness and inequality acceptance across different developmental stages, and we shed light on behavioral heterogeneity with respect to gender, SES, and cultural background. Moreover, we also discuss the role of preferences and social norms as determinants of fair behavior in children and adolescents. To learn about the origins of fair behavior, we address the influence of social environments, such as the family and we discuss the potential contribution of the genetic disposition. [ABSTRACT FROM AUTHOR]

Spoken language conveys rich sociolinguistic information about a speaker's language background. Previous research indicates that both monolingual and bilingual children use this information when making social decisions. They prefer local speakers whose accent or variety matches their own over speakers of foreign languages or second-language speakers. What remains unclear is how exposure to diverse linguistic communities affects children's preferences for non-local accents. This study examines social preferences for a regional and a second-language accent as a function of prior exposure to diverse accents and languages, measured on a continuous scale. German-speaking primary-school children (aged 7–10) were asked to choose stickers in a forced-choice task using animated cartoon characters. We replicated the observed social preferences for one's local accent. Interestingly, when the local accent was absent, children socially preferred a second-language accent (American) over a first-language regional accent (Bavarian), even though both accents were equally intelligible and relatively unfamiliar to the children, as determined through a sentence repetition task and a geographical classification task. Children's choices were not explained by continuous measures of accent or bilingual exposure. The results suggest a complex interaction of various factors not limited to the speakers' first- or second-language status.

The term ‘moral wiggle room’ (MWR) is often used to describe features of social situations that reduce the transparency between behaviors and their consequences. Previous research found that MWR decreases the likelihood of prosocial behavior and inferred that prosocial behavior is driven not only by genuine prosocial preferences but also by the desire to appear prosocially. Unfortunately, this postulation has never been specified as a theory. Consequently, studies testing the MWR effect reveal substantial heterogeneity in the understanding of core concepts, their operationalizations, and boundary conditions. To advance the field of MWR research, we remove these ambiguities by providing a verbal proposition-based theory specification. We first outline the original formulation of the MWR effect and its mediating mechanism, and we identify its loopholes. On this basis, we propose, refine, and distinguish between core propositions and auxiliary assumptions as well as relevant concepts and their operationalizations. The result is a fully testable theory of MWR (MWR-T) that includes a sharpened concept of MWR, distinguishes between three underlying psychological mechanisms of the behavioral MWR effect (i.e., anticipated social image damage, perceived social norms, and anticipatory guilt), and takes into account the role of individual differences in susceptibility to MWR (i.e., the joint effect of dispositional other-regarding preferences and social image concerns). Lastly, we relate MWR-T to existing theories and draw a roadmap for future work. With our contribution, we hope to stimulate more rigorous research on MWR and provide an example of the utility of verbal proposition-based theory specification.

Acute stress can change our cognition and emotions, but what specific consequences this has for human prosocial behaviour is unclear. Previous studies have mainly investigated prosociality with financial transfers in economic games and produced conflicting results. Yet a core feature of many types of prosocial behaviour is that they are effortful. We therefore examined how acute stress changes our willingness to exert effort that benefits others. Healthy male participants – half of whom were put under acute stress – made decisions whether to exert physical effort to gain money for themselves or another person. With this design, we could independently assess the effects of acute stress on prosocial, compared to self-benefitting, effortful behaviour. Compared to controls (n = 45), participants in the stress group (n = 46) chose to exert effort more often for self- than for other-benefitting rewards at a low level of effort. Additionally, the adverse effects of stress on prosocial effort were particularly pronounced in more selfish participants. Neuroimaging combined with computational modelling revealed a putative neural mechanism underlying these effects: more stressed participants showed increased activation to subjective value in the dorsal anterior cingulate cortex and anterior insula when they themselves could benefit from their exerted effort relative to when someone else could. By using an effort-based task that better approximates real-life prosocial behaviour and incorporating trait differences in prosocial tendencies, our study provides important insights into how acute stress affects prosociality and its associated neural mechanisms.

Institutions may rely on fundamental principles, e.g., of legal philosophy, but may also have evolved according to institutional fitness, as gauged by a society's well-being. In our stylized framework where two fundamental principles, equality and efficiency, conflict with each other, one of the three players is the third party who faces two symmetric co-players as culprits and determines whether to sanction the two culprits discriminatorily or treat them with parity. Relying on the theory of equilibrium selection, we derived equilibrium solutions and experimentally tested our behavioral hypotheses. We found that asymmetry in wealth between the two culprits let the sanctioning agent hold the richer culprit more responsible. Furthermore, our results demonstrated that when the sanctioning agent's decision was observable, sanctioning the two culprits discriminatorily induced them to coordinate on an efficient outcome. [ABSTRACT FROM AUTHOR]

Many collective action problems are inherently linked to honesty. By deciding to behave honestly, people contribute to solving the collective action problem. We use a laboratory experiment from two sites (n = 331 and n = 319) to test whether honest preferences can drive cooperation and whether these preferences can be differentially activated by framing. Subjects participate in an asymmetric information variant of the public goods game in one of two treatments that vary only in their wording: The Contribution Frame uses a standard public good game framing, while in the Honesty Frame, words aimed to trigger honesty are used. We measure subjects' honesty in three ways using the (i) sender–receiver task, (ii) the die‐roll task, and (iii) self‐reported honesty levels and account for other‐regarding preferences and social norms to disentangle key alternative motives. We find that all three measures of honesty preferences robustly predict contributions, as do other‐regarding preferences and empirical expectations but not normative expectations. Additionally, honesty preferences predict contributions in the Honesty Frame but not in the Contribution Frame, although the difference between these is not consistently significant. Finally, we find no differences in average cooperation across the treatments. [ABSTRACT FROM AUTHOR]

This paper studies the controversy on Fehr and Schmidt's model of inequity aversion. It borrows insights from disciplines such as philosophy and the sociology of science that have specialized in studying scientific controversies. Our goal is to contribute to the historical and methodological literature on behavioral economics, which happens to have neglected behavioral economists' research on social preferences. Our analysis of the controversy reveals some new insights about the relation of behavioral economics with other sub-fields in economics, as well as with other disciplines. [ABSTRACT FROM AUTHOR]

How generous are people when making consequential financial decisions in the real world? We took advantage of a rare opportunity to examine generosity among a diverse sample of adults who received a gift of U.S. $10,000 from a pair of wealthy donors, with nearly no strings attached. Two-hundred participants were drawn from three low-income countries (Indonesia, Brazil, and Kenya) and four high-income countries (Australia, Canada, the United Kingdom, and the United States) as part of a preregistered study. On average, participants spent over $6,400 on purchases that benefited others, including nearly $1,700 on donations to charity, suggesting that humans exhibit remarkable generosity even when the stakes are high. To address whether generosity was driven by reputational concerns, we asked half the participants to share their spending decisions publicly on Twitter, whereas the other half were asked to keep their spending private. Generous spending was similar between the groups, in contrast to our preregistered hypothesis that enhancing reputational concerns would increase generosity. [ABSTRACT FROM AUTHOR]

The use of laboratory experiments to study issues in agricultural policy has grown in prominence within the fields of agricultural and environmental economics. Such experiments are often conducted with university students and framed in an abstract manner. This raises questions about whether the findings of these experiments provide reliable insights on the behaviour of actual agents in real settings. We contribute to this methodological debate by analysing the impacts of sample population and framing on behaviour in the experiment and on two policy effects: the direction and the magnitude of the policy impact. We also examine the channels through which differences in results may occur. For this, we test if behaviour is correlated with a set of covariates collected from our samples, including socio‐demographics, social and risk preferences. Our main finding is that the type of subject significantly affects the magnitude of the policy impact. The two populations differ substantially in the representation of key characteristics and preferences, which in consequence affects behaviour in the experiment. We find no significant impact of framing on behaviour. [ABSTRACT FROM AUTHOR]

We study the distributional preferences of Americans during 2013–2016, a period of social and economic upheaval. We decompose preferences into two qualitatively different tradeoffs—fair-mindedness versus self-interest, and equality versus efficiency—and measure both at the individual level in a large and diverse sample. Although Americans are heterogeneous in terms of both fair-mindedness and equality-efficiency orientation, we find that the individual-level preferences in 2013 are highly predictive of those in 2016. Subjects that experienced an increase in household income became more self-interested, and those who voted for Democratic presidential candidates in both 2012 and 2016 became more equality-oriented. [ABSTRACT FROM AUTHOR]

Landscapes can lead to different emotions towards nature that in turn shape people's environmental behavior and decision processes. This study explores the role of emotions that Mediterranean landscapes foster in people and to what extent these emotions are associated with human–nature connectedness (HNC). We conducted 176 face-to-face surveys to explore HNC and the diversity of emotions associated with a suite of landscapes in Southeast Spain. Results revealed that Marine and Coastal Protected Areas received the highest number of positive emotions, whereas Greenhouses and Non-Protected Littoral were linked to negative emotions. We propose a framework for classifying emotional landscapes according to four groups: emotionally positive, negative, polarized or neutral. Results showed that emotions might play a key role in shaping HNC in Spanish Mediterranean landscapes and may be used as a common ground for understanding roots underpinning human decisions and actions that lead to sustainable management or landscape degradation. [ABSTRACT FROM AUTHOR]

The effect of social preferences, such as altruism and trust, on economic development is widely recognized. However, the reciprocal impact, i.e., how individuals experience the economic environment and how this shapes their social preferences, has remained largely under-explored. This study sheds light on this reciprocal effect, revealing an intriguing macroeconomic impact on individuals' social preferences. By harnessing the Global Preference Survey data and a non-linear regression model, our findings highlight an interesting trend: there is a discernible decrease in individuals' social preference as they experience enhanced economic conditions, and this effect is more pronounced for males. This crucial revelation underscores the importance for researchers and policymakers to take into account the prospective attenuation of social preferences in the pursuit of economic well-being. [ABSTRACT FROM AUTHOR]

Past experimental studies have documented a positive effect of observability on prosocial behavior. However, little is known about spillover effects on subsequent, unobserved prosocial actions. This paper studies the dynamic effect of observability on prosocial behavior. We hypothesize a twofold positive effect. First, in accordance with previous literature, people should act more prosocially when being observed. Second, this increased level of prosociality should motivate an ongoing elevated altruistic attitude, in accordance with the concept of altruistic capital formation. We test our predictions by running two experiments in which subjects make a first donation decision either observably or anonymously. Subsequently, all subjects face a second anonymous donation decision. In general, we observe high rates of altruistic behavior. However, we find only weak positive effects of observability on first-stage prosocial behavior and no effects on second-stage prosocial behavior. [ABSTRACT FROM AUTHOR]