Fairness Preferences and Priming in Contracting

Abstract

Many economists model individual behavior through preferences in utility functions (Camerer and Loewenstein 2004; DellaVigna 2009). The standard (neoclassical) economic theory assumes that these preferences are narrowly self-interested (cf. Samuelson 1948). However, the behavioral economic literature shows that preferences should also include social preferences, which take the well-being of others into account (e.g., Charness and Rabin 2002; Cooper and Kagel 2009; Fehr and Fischbacher 2002; Fehr and Schmidt 2006).