NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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Vjollca Sadiraj

Experimental Economics Center
Andrew Young School of Policy Studies
P.O. Box 3992
Atlanta, GA 30302-3992
Georgia

E-Mail: EmailAddress: hidden: you can email any NBER-related person as first underscore last at nber dot org
Institutional Affiliation: Georgia State University

NBER Working Papers and Publications

May 2016Moral Costs and Rational Choice: Theory and Experimental Evidence
with James C. Cox, John A. List, Michael Price, Anya Samek: w22234
The literature exploring other regarding behavior sheds important light on interesting social phenomena, yet less attention has been given to how the received results speak to foundational assumptions within economics. Our study synthesizes the empirical evidence, showing that recent work challenges convex preference theory but is largely consistent with rational choice theory. Guided by this understanding, we design a new, more demanding test of a central tenet of economics—the contraction axiom—within a sharing framework. Making use of more than 325 dictators participating in a series of allocation games, we show that sharing choices violate the contraction axiom. We advance a new theory that augments standard models with moral reference points to explain our experimental data. Our theor...
 
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