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doc. Ing. Ondřej Krčál, Ph.D.

Masaryk University, Czech Republic

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Authors: Ondřej Krčál and Diya Abraham

Abstract: We study how agents react to learning that they are less liked or preferred by a principal relative to their peers. Employing a laboratory experiment, we have a principal divide the responsibility for her earnings between two agents based on irrelevant personal information about them. We find that agents are less altruistic toward the principal when they perceive an intentional decision of the principal to make them less responsible, relative to when the same lower responsibility for the principal's earnings is determined randomly by a computer. Since there are no material benefits of greater responsibility in our game, we rule out the possibility that negative material reciprocity concerns could be driving behavior. Instead, we find that agents perceive a stronger subjective component to the principal's responsibility allocation decision than principals claim exist and also have a stronger emotional reaction to learning about their relative responsibility when the principal's decision is intentional as opposed to when it is randomly made on the principal's behalf. 

JEL Classification: M54, J24, C90, D91
Keywords: social comparison, trust, altruism, effort provision

Full Text: Social Comparisons and Effort Provision: The Response to Learning One is Less Preferred