IDEA FOUND // IDEA 175
Social Preferences
“An economic choice may depend on your payoff and on how the total is divided.”
01 / PLAINLY
What it means, plainly
Models of social preferences allow fairness, altruism, reciprocity, or dislike of inequality to matter alongside self-interest.
02 / CONTEXT
A little more
Models of social preferences add fairness, altruism, reciprocity, or aversion to unequal outcomes alongside self-interest. People and situations assign different weights to these motives.
03 / WHY IT MATTERS
Why it matters
Someone may reject an offer that pays money because the distribution or perceived intention also matters.
04 / EXAMPLE
A familiar example
Someone rejects a positive but highly unequal monetary offer because the split feels insulting.
05 / LIMIT
What it does not mean
The concept does not replace all behavior with altruism or reveal one motive from a single choice.
06 / NOTICE
Notice it in your day
Imagine two splits that give you the same payoff but differ in inequality. Note possible motives for each choice without treating any one motive as certain.
FINAL NOTE
The idea worth keeping
When modeling incentives, include how people may judge distribution and intentions.
QUESTIONS / 02
Questions people still have
What do social preferences add to a decision model?
They add motives concerning other people and distribution alongside self-interest.
Does one choice reveal a single motive?
No. People and situations assign different weights, and one decision cannot identify the cause.