According to the rational choice theory, economic agents are rational and self-interested. Based on the evidence from behavioural laboratory experiments (such as dictator games), behavioural economists suggest that people are not always self-interested, rather they have intrinsic preferences for others' well-being (e.g., altruism, inequity aversion). However, some other studies in behavioural economics investigate this further and disentangle the intrinsic preferences into several other factors. Following the discussion in the lecture, state two such studies that try to disentangle the true intrinsic preferences based on dictator games in the lab. Explain clearly and briefly the following: (1) what each study addresses. (ii) brief description of the experimental design; and (iii) intuitive explanations.
According to the rational choice theory, economic agents are rational and self-interested. Based on the evidence from behavioural laboratory experiments (such as dictator games), behavioural economists suggest that people are not always self-interested, rather they have intrinsic preferences for others' well-being (e.g., altruism, inequity aversion). However, some other studies in behavioural economics investigate this further and disentangle the intrinsic preferences into several other factors. Following the discussion in the lecture, state two such studies that try to disentangle the true intrinsic preferences based on dictator games in the lab. Explain clearly and briefly the following: (1) what each study addresses. (ii) brief description of the experimental design; and (iii) intuitive explanations.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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