Social Preferences and Strategic Uncertainty: An Experiment on Markets and Contracts Articles uri icon

publication date

  • December 2010

start page

  • 2261

end page

  • 2278


  • 5


  • 100

International Standard Serial Number (ISSN)

  • 0002-8282

Electronic International Standard Serial Number (EISSN)

  • 1944-7981


  • This paper reports a three-phase experiment on a stylized labor market. In the first two phases, agents face simple games, which we use to estimate subjects' social and reciprocity concerns. In the last phase,
    four principals compete by offering agents a contract from a fixed menu.
    Then, agents "choose to work" for a principal by selecting one of the
    available contracts. We find that (i) (heterogeneous) social preferences
    are significant determinants of choices, (ii) for both principals and
    agents, strategic uncertainty aversion is a stronger determinant of
    choices than fairness, and (iii) agents display a marked propensity to
    work for principals with similar distributional concerns.