Altruism

Inequality Aversion

Spite and Envy as Social Preferences

Zoë's Dilemma with Lottery Winnings

Situational Nature of Social Preferences

In a one-time, anonymous interaction, Person A is given $20 and can offer any portion of it to Person B. Person B has no choice but to accept the offer. A model assuming individuals are motivated solely by their own financial gain would predict that Person A will offer $0 and keep the full $20. However, in real-world experiments, Person A often chooses to offer a positive amount (e.g., $5). Which of the following provides the best explanation for this observed behavior?

An economic model that incorporates the idea that individuals' utility can be influenced by the well-being of others will always predict more generous and cooperative outcomes compared to a model assuming individuals only care about their own direct payoffs.

Partnership Dissolution Decision

Each scenario below describes an individual's decision. Match each scenario to the underlying preference that best explains the behavior.

Analyzing a Bonus Split Decision

Evaluating Assumptions in Economic Models

When an individual's personal satisfaction or utility is affected by the material payoffs or well-being of other people, and not just their own, they are said to exhibit ____.

In which of the following scenarios does an individual's action provide the clearest evidence that their utility is influenced by more than just their own direct material payoff?

An individual whose utility is solely determined by their own material payoff will always choose a different course of action than an individual whose utility is also influenced by the well-being of others, given an identical set of choices that impact both individuals.

The Community Garden Decision

Altruism

Inequality Aversion

Positive Reciprocity

Reciprocity

Classification of Social Preferences