Social Preferences and Strategic Interactions
Year: 2026
Type: book-chapter
Abstract: A large share of individuals deviates from self-interested behavior in many paradigmatic games, but in many other strategic situations almost all individuals behave in a self-interested manner. Models with heterogeneous social preferences provide a unifying understanding for these seemingly contradictory facts by focusing on the interaction between agents with other-regarding and selfish preferences. This focus explains why and when selfish agents behave as if they were other-regarding, as well as to why and when other-regarding agents behave as if they were selfish. This focus also helps understand (1) the importance of seemingly irrelevant institutional details, (2) the role of contractual incompleteness for the behavioral relevance of social preferences, (3) the role of social preferences for the prevalence of contractual incompleteness, and (4) why social preferences are an important component in explaining key characteristics of the employment relation. More recent evidence suggests that the empirical distribution of social preferences can be parsimoniously characterized by a small number of preference types which also have out-of-sample predictive power for important behaviors such as the demand for politically enforced redistribution.
Authors: Ernst Fehr, Julien Senn
Language: English
Subfield: Safety Research
Field: Social Sciences
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W7133245032