TY - JOUR AU - Lazear,Edward AU - Malmendier,Ulrike AU - Weber,Roberto TI - Sorting in Experiments with Application to Social Preferences JF - National Bureau of Economic Research Working Paper Series VL - No. 12041 PY - 2006 Y2 - February 2006 UR - http://www.nber.org/papers/w12041 L1 - http://www.nber.org/papers/w12041.pdf N1 - Author contact info: Edward P. Lazear Graduate School of Business and Hoover Institution Stanford University Stanford, CA 94305 Tel: 650/723-9136 Fax: 650/723-0498 E-Mail: lazear@gsb.stanford.edu Ulrike Malmendier Department of Economics 549 Evans Hall # 3880 University of California, Berkeley Berkeley, CA 94720-3880 Tel: 510-642-5038 E-Mail: ulrike@econ.berkeley.edu Roberto Weber Dept. of Social and Decision Sciences Carnegie Mellon University Pittsburgh, PA 15213 E-Mail: rweber@andrew.cmu.edu AB - Experiments provide a controlled setting where factors can be isolated and studied more easily than in the field, but they often do not allow participants to sort into or out of environments based on their preferences, beliefs, and skills. We conduct an experiment to demonstrate the importance of sorting in the context of social preferences. When individuals are constrained to play a dictator game, 74% of the subjects share. But when subjects are allowed to avoid the situation altogether, less than one third share. This reversal of proportions illustrates that the influence of sorting limits the generalizability of experimental findings that do not allow sorting. Moreover, institutions designed to entice pro-social behavior may induce adverse selection. We find that increased payoffs prevent foremost those subjects from opting out who share the least initially. Thus the impact of social preferences remains much lower than in a mandatory dictator game, even if sharing is subsidized by higher payoffs. Our experiment also sheds light on the motives for sharing. While much sharing is consistent with other-regarding preferences, the majority of subjects share without really wanting to, as evidenced by their willingness to avoid the dictator game and to even pay for avoiding it. ER -