Published in
Journal of the European Economic Association, forthcoming 2012.
Abstract
What is the relative importance of needs, entitlements, and nationality in people's social preferences? To study this question, we conducted a real effort dictator experiment where students in two of the world's richest countries, Norway and Germany, were matched directly with students in two of the world's poorest countries, Uganda and Tanzania. The experimental design made the participants face distributive situations where different moral motives came into play, and based on the observed behavior we estimate a social preference model focussing on how people make trade-offs between entitlements, needs, and self-interest. The study provides four main findings. First, entitlement considerations are crucial in explaining distributive behavior in the experiment; second, needs considerations matter a lot for some participants; third, the participants acted as moral cosmopolitans and did not assign importance to nationality in their distributive choices; and, finally, the participants' choices are consistent with a self-serving bias in their social preferences.