This paper investigates whether individuals are loss averse with respect to their status quo wealth level in sharing situations. In a real-effort dictator game, dictators are asked to share their earnings either before or after earning them. The instructions also variably emphasize the amount that the dictator will give or receive at the end of the experiment. This study finds that whether the money is already earned or not has no statistically significant effects on the average sharing behavior, regardless of which instructions are used. The results indicate that dictator game participants are not loss averse with respect to their status quo wealth level.
AndreoniJ (1995) Warm-glow versus cold-prickle: The effects of positive and negative framing on cooperation in experiments. Quarterly Journal of Economics110(1): 1–21.
2.
ArkesHRJoynerCAPezzoMV. (1994) The psychology of windfall gains. Organizational Behavior and Human Decision Processes59(3): 331–347.
3.
BabcockLLoewensteinGIssacharoffS. (1995) Biased judgement of fairness in bargaining. American Economic Review85(5): 1337–1343.
4.
BardsleyN (2008) Dictator game giving: Altruism or artefact?Experimental Economics11(2): 122–133.
5.
BatemanIKahnemanDMonroA. (2005) Testing competing models of loss aversion: An adversarial collaboration. Journal of Public Economics89(8): 1561–1580.
6.
BuchanNCrosonRJohnsonE. (2005) Gain and loss ultimatums. In: MorganJ (ed.) Experimental and Behavioral Economics, Advances in Applied Microeconomics, vol. 13. Greenwich, CT: Elsevier Science, pp.1–23.
7.
CamererCF (2000) Prospect theory in the wild: Evidence from the field. In: KahnemanDTverskyA (eds) Choices, Values and Frames. New York: Russell Sage, pp.148–161.
8.
CamererCF (2003) Behavioral Game Theory: Experiments in Strategic Interaction. Princeton, NJ: Princeton University Press.
9.
CamererCFFehrE (2004) Measuring social norms and preferences using experimental games: A guide for social scientists. In: HenrichJBoydRBowlesS. (eds) Foundations of Human Sociality: Economic Experiments and Ethnographic Evidence from Fifteen Small-Scale Societies, 1st edn. New York, NY: Oxford University Press.
10.
CappelenAWDrange HoleASørensenEØ. (2007) The pluralism of fairness ideals: An experimental approach. American Economic Review97(3): 818–827.
11.
CappelenAWNielsenUHSørensenEØ. (2013) Give and take in dictator games. Economics Letters118(2): 280–283.
12.
CappelenAWSørensenEØTungoddenB (2010) Responsibility for what? Fairness and individual responsibility. European Economic Review54(3): 429–441.
13.
CherryTLFrykblomPShogrenJF (2002) Hardnose the dictator. American Economic Review92(4): 1218–1221.
14.
CoxCLGotimerKRoyAK. (2010) Your resting brain cares about your risky behavior. PLoS One5(8): e12296.
15.
CrosonRGneezyU (2009) Gender differences in preferences. Journal of Economic Literature47(2): 1–27.
16.
DanaJWeberRAKuangJX (2007) Exploiting moral wiggle room: Experiments demonstrating an illusory preference for fairness. Economic Theory33(1): 67–80.
17.
DreberAEllingsenTJohannessonM. (2013) Do people care about social context? Framing effects in dictator games. Experimental economics16(3): 349–371.
18.
EckelCCGrossmanPJ (2008) Differences in the economic decisions of men and women: Experimental evidence. In: PlottCRSmithVL (eds) Handbook of Experimental Economic Results, vol. 1, 1st edn.New York, NY: Elsevier, pp.509–519.
19.
EngelC (2011) Dictator games: A meta study. Experimental Economics14(4): 583–610.
20.
ForsytheRHorowitzJLSavinNE. (1994) Fairness in simple bargaining experiments. Games and Economic Behavior6(3): 347–369.
21.
FrohlichNOppenheimerJMooreBJ (2001) Some doubts about measuring self-interest using dictator experiments: The costs of anonymity. Journal of Economic Behavior & Organization46(3): 271–290.
22.
GillDProwseV (2012) A structural analysis of disappointment aversion in a real effort competition. American Economic Review102(1): 1–35.
23.
HoffmanEMcCabeKShachatK. (1994) Preferences, property rights and anonymity in bargaining games. Games and Economic Behavior7(3): 346–380.
24.
HorowitzJKMcConnellKE (2002) A review of WTA/WTP studies. Journal of Environmental Economics and Management44(3): 426–447.
25.
IriberriNRey-BielP (2011) The role of role uncertainty in modified dictator games. Experimental Economics14(2): 160–180.
26.
KahnemanDTverskyA (1979) Prospect theory: An analysis of decision under risk. Econometrica47(2): 263–291.
27.
KonowJ (2000) Fair shares: Accountability and cognitive dissonance in allocation decisions. American Economic Review90(4): 1072–1091.
28.
KöszegiBRabinM (2007) Reference-dependent risk attitudes. American Economic Review97(4): 1047–1073.
29.
KrupkaEWeberR (2013) Identifying social norms using coordination games: Why does dictator game sharing vary?Journal of the European Economic Association11(3): 495–524.
30.
ListJA (2007) On the interpretation of giving in dictator games. Journal of Political Economy115(3): 482–492.
31.
MarkowitzH (1952) The utility of wealth. Journal of Political Economy60(2): 151–158.
32.
NovemskyNKahnemanD (2005) The boundaries of loss aversion. Journal of Marketing Research42(2): 119–128.
33.
RosnowRLRosenthalR (1997) People Studying People. Artifacts and Ethics in Behavioral Research. New York: WH Freeman and Company.
34.
SmallDA (2010) Reference-dependent sympathy. Organizational Behavior and Human Decision Processes112(2): 151–160.
35.
SmithVL (2010) Theory and experiment: What are the questions?Journal of Economic Behavior & Organization73(1): 3–15.
SwopeKCadiganJSchmittP. (2008) Social position and distributive justice: Experimental evidence. Southern Economic Journal74(3): 811–818.
38.
TverskyAKahnemanD (1981) The framing of decisions and the psychology of choice. Science211: 453–458.
39.
TverskyAKahnemanD (1986) Rational choice and the framing of decisions. Journal of Business59(4): 251–278.
40.
TverskyAKahnemanD (1991) Loss aversion in riskless choice: A reference-dependent model. Quarterly Journal of Economics106(4): 1039–1061.
41.
TverskyAKahnemanD (1992) Advances in prospect theory: Cumulative representation of uncertainty. Journal of Risk and Uncertainty5(5): 297–323.
42.
VisserMSRoelofsMR (2011) Heterogeneous preferences for altruism: Gender and personality, social status, giving and taking. Experimental Economics14(4): 490–506.
