Joint Distributional Choices: An Experimental Analysis

Abstract

This paper uses an economic experiment to identify the presence of descriptive norms associated with the jointly determined division of a surplus. We consider the results from a two-stage experiment in which participants contribute to a common pool which is then divided using a coordination game between participants. Treatments effects are introduced by varying the context in which individual contributions to the pool are established. We find there is no simple universal principle (or norm) guiding participants when they make these joint distributional choices. Rather, we find self-interest, self-serving bias and a participant's contribution relative to others play a role in determining their distributive choices, their expectations regarding their partners’ likely choices and their evaluation of the fairness of the resulting outcomes. Additionally, we find that the way in which these determinants influence choice depends on whether individual contributions are determined randomly instead of by individuals’ skill or effort.