Social Preferences and Strategic Uncertainty: An Experiment on Markets and Contracts

• DOI: 10.1257/aer.100.5.2261
• Publication Date: 2010-12-09T18:58:10Z
• Authors: Antonio Cabrales; Raffaele Miniaci; Marco Piovesan; Giovanni Ponti
• Keywords: Stylized fact; Reciprocity; Social Preferences; Incomplete contracts; Strategic complements

This paper reports a three-phase experiment on stylized labor market. In the first two phases, agents face simple games, which we use to estimate subjects' social and reciprocity concerns. last phase, four principals compete by offering contract from fixed menu. Then, “choose work” for principal selecting one of available contracts. We find that (i) (heterogeneous) preferences are significant determinants choices, (ii) both agents, strategic uncertainty aversion is stronger determinant choices than fairness, (iii) display marked propensity work with similar distributional (JEL D82, D86, J41)