Mental Accounting and Other-Regarding Behavior: Evidence from the Lab

This paper uncovers a key determinant of the other-regarding behavior that permeates bargaining experiments. Examining a one-shot dictator game that has the first-mover dictate the split of an amount of money, dictators acting over earned money exhibited self-interested behavior in 76% of bargains. This result stands in stark contrast to the baseline experiment in which dictators acting over allocated money displayed self-interested behavior in only 26% of bargains. Self-interested behavior appeared at greater levels using an earnings protocol than any previous variation of the dictator game. While the distinction between earned and unearned wealth is likely context specific, the earnings protocol may be an important option for future laboratory research. Specifically, the earnings protocol may provide a closer correspondence between the laboratory and individual choices over personal assets.