HISTORY DEPENDENCE AND THE FORMATION OF SOCIAL PREFERENCES: AN EXPERIMENTAL STUDY

Authors

  • DAVID J. COOPER,

    1. Cooper: Professor, Department of Economics, Florida State University, Tallahassee, FL 32306. Phone 850 644 7097, Fax 850 644 4535, E-mail: djcooper@fsu.edu
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  • CAROL KRAKER STOCKMAN

    1. Cooper: Professor, Department of Economics, Florida State University, Tallahassee, FL 32306. Phone 850 644 7097, Fax 850 644 4535, E-mail: djcooper@fsu.edu
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    • The authors would like to thank the National Science Foundation for financial support. We would like to thank two anonymous referees, Eric Bettinger, Jordi Brandts, Gary Charness, Yan Chen, John Ham, John Kagel, Jack Ochs, Charles Plott, Mari Rege, Al Roth, and Lise Vesterlund for helpful discussions. The usual caveat applies.


Abstract

We study the minimal contributing set (MCS) game, a three-person sequential step-level public goods game. The behavior of critical third players changes with experience in this game even though they face no strategic or payoff uncertainty. We explore why these changes occur by manipulating subjects' experience in the first half of the experiment. The treatments give subjects very different initial experiences, but all treatments move subjects' choices toward experienced subjects' play in the control sessions. Long-run play is indistinguishable across treatments. Our results are more consistent with the “discovered preferences” hypothesis (Plott 1996) than either the “constructed preference” or “reference point” hypotheses. (JEL H41, C72, C92)

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