Measuring other-regarding preferences and explaining cooperative decisions

Economics

Speaker:Ryan Murphy, University of Zurich
Date: Friday 7 December 2012
Time: 16.15
Location: Matrix Lecture Theatre, Building One

Further details

Narrow self interest is often used as a simplifying assumption when studying people making decisions in social contexts. Nonetheless, people exhibit a wide range of different motivations when choosing among interdependent outcomes. Measuring the magnitude of the concern for others, sometimes called social preferences, other-regarding preferences, welfare tradeoff ratios, or Social Value Orientation (SVO), has been an interest of many economists and psychologists for decades and several different measurement methods have been developed thus far. Here we introduce a new measure of SVO that has several advantages over existent methods. For instance, the measure yields a continuous unidimensional scale of SVO, allows for distinguishing between inequality aversion and efficiency concerns (joint gain maximization), is easy to use and has very good psychometric properties. Measuring SVO on a continuous unidimensional scale allows researchers to use the full explanatory potential of the construct due to unrestricted statistical power. Moreover, since the measure yields a high resolution output, the detection of subtle yet important effects is facilitated and opens the opportunity to use SVO also as a dependent variable. A detailed description of the new measurement method is provided, along with norming data that provides evidence of its solid psychometric properties. We conclude with a demonstration of how this construct can be particularly useful in predicting cooperation in social dilemmas.