Engelmann Strobel

Public Finance Review
Volume 35 Number 2
March 2007 285-310
Ó 2007 Sage Publications
Preferences over 10.1177/1091142106294713
http://pfr.sagepub.com
Income Distributions hosted at
http://online.sagepub.com
Experimental Evidence
Dirk Engelmann
Royal Holloway, University of London, Surrey, United Kingdom
Martin Strobel
University of Maastricht, the Netherlands
Preferences over income distribution are the basis for a variety of models
that aim at explaining results in economic experiments. The direct evidence
concerning these preferences, however, is limited to a relatively small set of
games. The authors discuss crucial evidence, including that from a recent
large-scale Internet experiment and the different models’ performance. It
appears that subjects are highly heterogeneous and that the relative impact
of different motives depends on a variety of factors. The authors present a
general model that can help as a starting point for measuring distributional
preferences.
Keywords: income distribution; Internet experiments; experimental

economics; social preferences
he classical economic model of the selfish rational decision maker

T fails quite miserably in some experiments (most famously, perhaps
the ultimatum game by Güth, Schmittberger, and Schwarze 19821 ), but
does quite well in others (e.g., Bertrand games). In recent years, several
attempts have been made to extend the model to bring it in line with the
evidence. The attempts most prominent in applications have largely
focused on preferences over the distribution of payoffs in the game—for
example, the inequality aversion models by Fehr and Schmidt (1999
[henceforth F&S]) and Bolton and Ockenfels (2000 [henceforth B&O]).2
Authors’ Note: We thank participants of the Andrew Young School of Policy Studies,
Georgia State University, conference ‘‘Experimental Public Economics,’’ particularly Benno
Torgler, as well as an anonymous referee and the editor for helpful comments. Financial
support by the Dutch Science Foundation (NWO) is gratefully acknowledged.
285
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distribution.
286 Public Finance Review
These models have been able to organize a large amount of the experi-
mental evidence, mostly because they are able to rationalize why, in some
games, such as the ultimatum game, a relatively small share of subjects
who are concerned with fairness can have a large impact on the experi-
mental outcome, while in other games, such as market games, even a rela-
tively large share of nonselfish players would not lead to a deviation from
the competitive market prediction.
A peculiarity of F&S and B&O is, however, that while the models
assume players to be concerned only with the distribution of income from
the experiment, they are motivated almost exclusively by strategic games,
where much more than distributional concerns matter—most important,
beliefs, strategic behavior, and reciprocity.3 Basing the models only on
distributional concerns had the great advantage of making them more
tractable than alternative models that take concerns for reciprocity expli-
citly into account (e.g., Rabin 1993; Dufwenberg and Kirchsteiger 2004).
It is, however, striking that little direct evidence on distributional prefer-
ences has informed the models. The only nonstrategic game that is dis-
cussed in both studies is the classic dictator game (Forsythe et al. 1994).
Only recently, more complicated experiments that provide direct evi-
dence on distributional preferences have been conducted.4 These fall
broadly into two categories. First, there are multiplayer versions of the
dictator game that have aimed at testing the distributional models expli-
citly (e.g., Charness and Rabin 2002 [henceforth C&R]; Engelmann and
Strobel 2004 [henceforth E&S]; Cox and Sadiraj 2006 [henceforth C&S]).
Second, Cox (2004), for example, separates distributional concerns from
reciprocity by conducting experiments in a strategic version and nonstrate-
gic controls, where the choice of one player is isolated as a dictator game.5
These experiments have inspired alternative models that are based on con-
vex altruistic preferences (C&R, C&S), similar to the model by Andreoni
and Miller (2002 [henceforth A&M]), which was inspired by systematic
variations of costs in two-player dictator games.
When summarizing the evidence, we see that although preferences over
the distribution of payoffs are at the heart of the above models, we know
surprisingly little about them. The evidence is limited and the results not
very robust despite the fact that purely distributional experiments should
be the easiest playground for these models since there are no confounding
effects of reciprocity or strategic concerns. It appears that a large variety
of distributional motives (maximin preferences, efficiency concerns,
inequality aversion, and competitiveness) have an impact on the choices
in purely distributional games. In a large-scale Internet experiment, we

distribution.
Engelmann, Strobel / Preferences over Income Distributions 287
have isolated these motives and found some evidence for a role of most of
them.
In the next section, we present the most prominent recent models of
distributional preferences. We also later discuss crucial evidence from
two-player dictator games, the evidence from multiplayer dictator games,
and our Internet experiment. Then we present a general distributional
model that can organize most of the data and might be a useful starting
point for testing distributional preferences. The last section concludes.
Prominent Models on Distributional Preferences
The prominent purely distributional models fall into two categories:

models based on inequality aversion (B&O and F&S) and models based
on altruism (C&R, C&S, A&M). Throughout this section, we denote the
decision maker (or dictator) by i, his or her utility by Ui , and the (mone-
tary) payoff of person k by xk , the vector of payoffs by x, and the number
of players by n.
The major difference for the present purpose between the inequality
aversion models by B&O and F&S lies in the measure for inequality. In
B&O, the utility function is given by Ui ðxi ; si Þ, where si = Pnxi is
xk
P k = 1
subject i’s share of the total payoff (and si = n1 if nk = 1 xk = 0). For given
xi ; Ui is assumed to be maximal for si = n1. In F&S, the utility function is
given by
1 X
Ui ðxÞ = xi − ai maxfxk − xi ; 0g
n − 1 k 6¼ i
1 X
− bi maxfxi − xk ; 0g; ai ≥ bi ≥ 0; bi < 1:
n − 1 k 6¼ i
Hence, in B&O, subjects like the average payoff to be as close as possi-

ble to their own payoff, while in F&S, subjects dislike a payoff difference
to any other individual. According to B&O, a subject would thus be
equally happy if all subjects received the same payoff or if some were rich
and some were poor, as long as she or he received the average payoff, but
according to F&S, she or he would clearly prefer that all subjects get the
same. In a real-life situation, F&S predict that the middle class would tax
the upper class to subsidize the poor, whereas B&O do not.
The altruism models differ sharply from the inequality aversion models
in the predicted behavior toward subjects who have a higher payoff, as

distribution.
they predict that a player would not pay to harm a better-off player.6 They
agree, however, with the inequality aversion models in the sense that
players who are comparatively worse off than others are treated better. In
C&R, this is modeled by a higher weight for the payoff of the worst-off
player in the utility function. C&R present a more general utility function,
and they find what they call quasi-maximin preferences to best explain the
results in their (primarily dictator and ultimatum-like) experiments. Speci-
fically, the utility function in C&R is
" #
X
n
Ui ðxÞ = ð1 − gÞxi + g d min fxj g + ð1 − dÞ xj ;
j ∈ f1;:::;ng
j=1
where g ∈ ½0; 1 reflects the relative concern for own and others’ payoffs,
and d ∈ ½0; 1 measures the relative weight of the lowest payoff and the
total payoff. Hence, subjects care for maximizing the minimal payoff
(maximin preferences) but also for efficiency.7
C&S assume convex altruistic preferences that generalize quasi-
maximin preferences:
" #
1 a X
Ui ðxÞ = x +y xaj ; a ∈ ð−∞; 1Þ\f0g
a i j 6¼ i
!y
Y
= xi xj ; a = 0:
j 6¼ i
Furthermore, players are assumed to be egocentric, meaning that, all

else equal, they would always like to swap payoffs with another player
who is better off.8 Together with monotonicity and convexity, this implies
a < 1 and 0 ≤ y < 1.
A&M present a two-player model that is similar to C&S, with
Ui ðxÞ = ðaxri + ð1 − aÞxrj Þ1=r :
Previous Evidence from Pure Distribution Games
Evidence from the Classic Dictator Game and Its Variants

In the dictator game, the first player (‘‘dictator’’) simply chooses
among a set of available allocations between himself or herself and the
second player (‘‘receiver’’). In the classic dictator game (Forsythe et al.
1994, which was aimed at better understanding the results in the ultima-
tum game), the dictator’s task is simply to split a fixed sum of money.9

distribution.
Positive giving is consistent with altruism (in particular, maximin prefer-

ences) or inequality aversion, but both B&O and F&S have problems
organizing the data.10
The basic dictator game has been intensively tested for robustness with
respect to procedures (e.g., double blindness), subject pools, and other fac-
tors, such as increased social distance. It appears that the dictator game is
less robust than other games. Double-blind procedures reduce giving by
about half (Hoffmann et al. 1994; Hoffmann, McCabe, and Smith 1996).11
The most dramatic effect, however, was found with respect to entitlement.
Cherry, Frykblom, and Shogren (2002) let dictators earn the original pie
through a quiz, and nearly all dictators give zero.
While it might be most surprising to an economist that double-blind pro-
cedures do not reduce the share allocated to the receiver to zero, it is note-
worthy that the effects are stronger than for similar variations in the
ultimatum game.12 A possible explanation is that these variations affect dis-
tributional concerns but not other considerations such as strategic thinking
or reciprocity.
The consistency of dictators’ choices across several games has been
addressed by A&M, who have studied the behavior of subjects across eight
to eleven dictator games with different budgets and different costs of giving.
They find that about 98 percent of their subjects make decisions that can be
rationalized by a quasi-concave utility function but also a high degree
of heterogeneity. In Blanco, Engelmann, and Normann (2006), dictators
choose between an allocation of 20 for themselves and 0 for the receiver or
x for both, where x was varied between all integers from 0 to 20.13 As
A&M, they find that the vast majority of subjects are rational in the sense
that if they prefer (x; x) over (20; 0) and y > x, then they also prefer (y; y)
over (20; 0). However, they also find a large degree of heterogeneity.
The dictator control experiment for the trust game by Cox (2004) sepa-
rates dictator giving from inequality aversion. Both dictators and receivers
have an initial endowment of $10, and dictators can send part of their
endowment to the receivers, which is then tripled. Among the dictators, 63
percent sent part of their endowment, which is inconsistent with inequality
aversion since it generates disadvantageous inequality.14 Since the linear
quasi-maximin model predicts that dictators would send either nothing or
all $10 and only 13 percent chose the latter, C&R do not add much expla-
natory power. C&S, in contrast, can rationalize the intermediate choices.
In general, the inferences we can draw from two-player dictator games
concerning the relevance of different distributional motives are limited
because in most cases, several motives coincide—for example, inequality

distribution.
aversion coincides either with maximin preferences (if advantageous

inequality is reduced) or with competitiveness (if disadvantageous inequal-
ity is reduced).15
Evidence from Multiplayer Dictator Games

Taking note of the limited ability of two-player dictator games to dis-
criminate between different distributional motives (with the exception of
Andreoni and Miller 2002), it is surprising that there is a relative sparsity
of dictator experiments with more than two players. To the best of our
knowledge, this section contains a complete survey.16;17
Charness and Rabin (2002) base their analysis primarily on two-player
games, but they also included 3 three-player dictator games. The results
are in favor of quasi-maximin preferences, with a higher weight on the
maximin component than the efficiency component.
In Engelmann and Strobel (2004), we initially aimed at discriminating
between B&O and F&S, which is impossible in two-player games (except
for some rather artificial cases). The dictator had a fixed, intermediate
income and could choose among three different money distributions
between a high-income and a low-income person. The crucial aspect of
the design is that redistribution in favor of the low-income person (which
would be predicted by F&S as it reduces advantageous and disadvanta-
geous inequality) increases the difference of the dictator’s share and the
‘‘fair share’’ of 1=3, so that B&O would predict redistribution in favor of
the high-income person. In order to balance a possible confound of effi-
ciency concerns, in one treatment, redistributing to the low-income subject
increases the total payoff, whereas in the other, it decreases the total pay-
off. In the first treatment, the vast majority choose in line with F&S and
efficiency; in the second, they split roughly equally between the F&S allo-
cation and the one in line with B&O and efficiency. These results favor
F&S over B&O. However, F&S coincide with maximin in these games,
and F&S do not capture the difference in choices between the treatments,
which clearly point to efficiency concerns. Further treatments also support
C&R, but in a treatment where the dictator is the low-income individual,
one third of the subjects choose contrary to C&R but in line with inequal-
ity aversion.18 Hence, overall, the quasi-maximin model does relatively
well, and the uncaptured choices can be captured by generalized versions.
While in E&S, the C&R model needed to be generalized only to ratio-
nalize relatively small shares of the data, it is more apparent in two four-
player dictator games by C&S that the exclusive role of the minimal

distribution.
payoff is too crude a simplification. Either the minimal payoff or the total
payoff is held constant across allocations, and satisfying quasi-maximin
preferences comes at high costs for the second poorest person. Only a
small minority choose in line with C&R. Bolton and Ockenfels (forthcom-
ing) find similar results in a six-person dictator game.
Cason and Mui (1997) compare behavior in standard two-player dicta-
tor games with that of the same subjects in a game where two dictators
split a pie of double the size between themselves and two receivers, with
equal shares for both dictators and for both receivers. They find that teams
give more, which they find best to be explained by social comparison.19
Within the relatively small set of multiplayer dictator games, there has
not yet been much room for robustness tests, but those that have been con-
ducted point again at a relatively high sensitivity to procedural details,
subject pools, and specifics of the games in question.
Fehr, Naef, and Schmidt (forthcoming [henceforth FNS]) present
results of replications of two of the games in E&S. They find strong sub-
ject pool effects. While economics students in their sample decide in favor
of the efficiency maximizing allocation even more frequently than in E&S
(where subjects were first-year economics and business administration
students), other subjects choose the inequality minimizing allocation sig-
nificantly more often. They conclude that for noneconomists, the impor-
tance of efficiency concerns is lower than the results in E&S have
suggested. We discuss this issue further in the next section.
A fundamental limitation of all pure distributional models is uncovered
by Karni, Salmon, and Sopher (2001). Dictators do not choose an allo-
cation but instead choose the distribution of probabilities among three
players to win a fixed pie. Although each resulting allocation is necessa-
rily unequal (and similarly, efficiency and minimal payoff cannot be
affected), they find that many subjects prefer a more equal distribution of
probabilities. This indicates that fair procedures can play similar roles as
fair allocations, as Bolton, Brandts, and Ockenfels (2005) argue.
Bolton and Ockenfels (forthcoming) have studied three-person games
with majority voting about the allocation. They find that subjects vote
more frequently for the efficient but unequal allocation if they vote before
roles are assigned, although they vote conditional on the role. This indi-
cates that they are more willing to accept an unequal distribution if the
game is embedded in a fair random procedure that gives all subjects equal
opportunity to end up as the high-income individual. Ackert et al. (2005)
study voting upon allocations in five-person groups and find evidence for

distribution.
maximin preferences and inequality aversion but little evidence for effi-
ciency concerns.
Dana, Weber, and Kuang (2003) present a game where there is no dic-
tator, but in a three-player game, two players have veto power. They can
unilaterally enforce an equal distribution, while the third player is passive.
Significantly fewer active players choose the equal distribution compared
to a two-person dictator game. This suggests that distributional prefer-
ences are also sensitive to whether the decision maker has to take all the
responsibility.20
In Herreiner and Puppe (2004), fictitious objects have different value
for different subjects, so that a person can be envious (i.e., would rather
have another person’s bundle) even if the payoff distribution is equal.
They find only little evidence of envy in bargaining games, but envy
appears to play some role in discriminating between three-person alloca-
tions in questionnaires.
A Large-Scale Experiment That Systematically

Isolates Distributional Motives
Based on E&S, we conducted an Internet experiment using a larger set

of similar games that isolated different distributional motives one at a time
in order to study their relative roles more systematically. We also systema-
tically varied the impact of the choice on the decision maker’s payoff (for
details, see Engelmann and Strobel 2006). Two thousand subjects, regular
participants in a panel of a marketing institute, were invited to participate.
In total, 1,103 responded to the inquiry, of which 872 had to make choices
in ten simple three-person distribution games, including one game where
the actual payoffs for all three allocations they could choose from were
randomly generated within certain intervals. The remaining participants
had to make choices in eight five-person games (217 subjects) or in only
one three-person game (14 subjects). Subjects were paid on a random
basis.21 Two key advantages of our Internet experiment over traditional
laboratory experiments are that it allowed us to recruit a very large number
of subjects, and these participants had more varied backgrounds than those
who can easily be recruited for a laboratory experiment. A possible disad-
vantage is that such an Internet experiment naturally allows for less control
than a laboratory experiment. We have, however, taken precautions to
minimize possible problems. For example, once participants had opened
their questionnaire, it was not possible to access another questionnaire by

distribution.
Table 1
Example for Three-Player Games in Engelmann and Strobel (2006)
game D_4 A B C
Person 1 60 40 30
Person 2 (decision maker) 10 − x 10 10 + x
Person 3 20 30 30
eff slfx>0 ; cmp; env; iav
x=0 38.0 (27) 26.8 (19) 35.2 (25)
x=1 18.1 (13) 22.2 (16) 59.7 (43)
x=2 8.9 (5) 12.5 (7) 78.6 (44)
x=3 19.7 (12) 14.8 (9) 65.6 (40)
x=4 17.0 (9) 9.4 (5) 73.6 (39)
x=5 6.8 (4) 11.9 (7) 81.4 (48)
Note: Subjects faced nine games of this type that isolated different motives or combinations of
motives. For each game, incentives (x) were varied across subjects; choices for each allocation
are presented as percentages, with numbers in parentheses the absolute number of subjects.
logging off and on again. Furthermore, we got detailed biographic data on

all subjects from the marketing institute.
The three-person games other than the random games were designed
such that each motive that we considered potentially relevant was isolated
in at least one game (we cannot isolate the b-component of F&S since it
either coincides with maximin preferences or efficiency concerns). This
means that there was only one allocation that was predicted by this motive,
and we systematically varied the costs for choosing this allocation. For
example, the game in table 1 isolated efficiency concerns, where the costs
x differed across subjects. Only efficiency concerns (eff) would predict the
choice of allocation A, whereas maximin preferences (mxm) and generosity
(gen, the b-component of F&S) are irrelevant (since the decision maker has
the lowest payoff). Competitiveness (cmp), envy (env, the a-component of
F&S), inequality aversion in the form of B&O (iav), and selfishness (slf, for
x > 0) predict C. In this game, 38 percent choose the efficient allocation
when it is free, but the share decreases when this implies positive costs.
Overall, the results confirmed our conclusions from E&S. Efficiency
concerns and maximin preferences appear to be more important than
inequality aversion, although the role of efficiency seems to be weakened.
In particular, an allocation that maximizes both efficiency and the minimal
payoff is in all three-player games chosen by a wide majority, and this is
robust to varying the costs for the decision maker by 0 to 5 euros. When

distribution.
we isolate B&O-type inequality aversion or competitiveness, they do very

poorly (less than 10 percent of choices). Envy appears to be more impor-
tant, covering 10 to 25 percent of choices.
The strong role of inequality aversion relative to efficiency concerns
that FNS found in games from E&S with noneconomists appeared at odds
with the results from our Internet experiment, which used a broader sam-
ple of subjects.22 We hence suspected that while the subjects in their first
control experiment might care more for equality, they might be equally
unrepresentative of the general population as the economics students.23
A closer look at our data reveals similar subject pool effects as FNS
when we classify our subjects into groups with unambiguous economics
backgrounds, unambiguous noneconomics backgrounds, and ambiguous
backgrounds (the latter including loosely economics-related fields such as
accounting or cases of insufficient information). The subject pool effects
are, however, weaker and not consistent across games (for details, see
Engelmann and Strobel 2006). Hence, we do not think that the available
data on subject pool effects allow for the conclusion that efficiency con-
cerns are of minor importance for noneconomists.24
In a conditional logit analysis for the games with randomly chosen
payoffs,25 restricted to the subjects who had either an unambiguous eco-
nomics background or an unambiguous noneconomics background, we
find a significant impact of efficiency and maximin, but not of inequality
aversion, neither according to the measure by B&O (iav) nor for the sepa-
rate components of the F&S model. We also find a positive but insignifi-
cant interaction effect between efficiency and an economist dummy (see
table 2).26 Restricting the analysis to unambiguous noneconomists yields
significant effects for efficiency (p < :001) and maximin (p = :001) and
marginally for iav (p = :062Þ. In contrast, for economists, only efficiency
is significant (p = :001Þ. For the ambiguous cases, efficiency (p < :001Þ,
maximin (p < :001Þ, FSaðp = :039Þ, and iav (p = :037Þ are significant,
whereas FSb has a marginally significant (p = :059Þ negative impact, and
competitiveness is also marginally significant (p = :093Þ.27 Thus, we also
find that economists care more for efficiency, but efficiency is also of sub-
stantial importance for noneconomists.
Overall, the results in Engelmann and Strobel (2006) reveal a high
degree of heterogeneity among subjects. Moreover, most subjects appear
to be driven by a mixture of motives. This is best illustrated by figure 1.
It shows for each motive the distribution of subjects with respect to the
number of games in which they chose consistently with that motive
(among the ten choices they made in three-player games). Figure 1 reveals

distribution.
Table 2
Conditional Logistic Regressions for the Impact of Various Motives
on the Propensity to Choose Certain Allocations in the Games with
Randomly Generated Payoffs in Engelmann and Strobel (2006)
Odds Standard [95 Percent
Motive Ratio Error z p > jzj Confidence Interval]
Competitiveness 1.0874 0.0617 1.48 0.140 [0.9730, 1.2152]

FSa 1.0322 0.0255 1.28 0.201 [0.9833, 1.0834]
FSb 0.9880 0.0254 –0.47 0.639 [0.9395, 1.0390]
iav 1.0511 0.0319 1.64 0.101 [0.9904, 1.1155]
Maximin 1.0801 0.0238 3.50 < 0.001 [1.0345, 1.1278]
Efficiency 1.0748 0.0166 4.67 < 0.001 [1.0428, 1.1079]
Interact 1.0256 0.0189 1.37 0.170 [0.9892, 1.0633]
Note: Interact is the interaction between the efficiency measure and a dummy of whether the
subject has an economics background.
that very few subjects appear to be driven by a single dominant motive

and that the only motives for which a nontrivial share of subjects chose
consistently with this motive in all ten games are maximin preferences
(14:6 percent), efficiency concerns (8:3 percent), and selfishness (10:1 per-
cent). It is particularly interesting that for these three motives, more dicta-
tors are consistent in all ten games than in nine games. This suggests that
these subjects were clearly guided by the respective (for them) dominating
motive and that the consistency was not an artifact of coinciding with
other motives.28
Note that all the models considered allow for a combination of several
motives (at least for the combination of selfishness and one or more other
motives). For example, a person with consistent C&R preferences does
not necessarily have to decide in line with maximin or with efficiency in
all games but only with selfishness, maximin, or efficiency. Similarly, a
subject with consistent F&S preferences would not have to be in line with
envy all the time. However, in all except for one type of game (plus possi-
bly the game with randomly generated payoffs), the differences between
allocations in terms of the a-component of F&S are larger than those in
terms of the b-component. Furthermore, the costs in terms of the decision
maker’s own payoff are generally smaller than the changes in terms of the
a- and b-components. We can derive that at least all subjects with ai ≥ 1
should choose consistently with the envy motive in at least eight games.
Only 9.06 percent do so, substantially below the 40 percent of subjects

distribution.
Figure 1
296
Distribution of Subjects According to the Number of Three-Person Games in Which Their
Behavior Is Consistent with Each of the Following Motives: Competitiveness (Cmp), Efficiency (Eff),
Envy (i.e., FS [Env]), Generosity (i.e., FS [Gen]), Inequality Aversion According to the Bolton
and Ockenfels (2000) Model (Iav), Maximin Preferences (Mxm), and Selfishness (Slf)
consistency 3 person games

300
250
Cmp
200 Eff
Env
150 Gen
Iav
distribution.
# of subjects
100 Mxm
Slf
50
0
0 1 2 3 4 5 6 7 8 9 10
Cmp 157 203 205 165 90 28 13 1 5 3 2
Eff 6 13 24 65 112 177 182 108 64 49 72
Env 0 1 11 86 172 221 175 127 59 20 0

Gen 1 4 13 35 58 132 192 211 163 59 4
Iav 0 7 78 201 275 194 90 24 3 0 0
Mxm 0 4 8 22 48 115 124 153 148 123 127
Slf 1 2 15 43 96 172 211 142 71 31 88
consistency with motive (0=never, 10=always)
with ai ≥ 1 that F&S assume in order to explain various experimental

results.
In the five-player dictator games in Engelmann and Strobel (2006),
each participant made eight choices, being the person with the second
highest payoff in six games and with the third highest in two games.29 In
all these games, efficiency concerns and maximin preferences always
coincide. In half of these games, however, increasing the lowest and the
total payoff comes at relatively high costs in terms of the second lowest
payoff. In these games, fewer subjects decide in line with C&R than in the
three-player games (and more subjects decide in line with F&S), but C&R
do better when the trade-off is more in its favor. This is in line with the
six-player games of Bolton and Ockenfels (forthcoming) and the four-
player games in C&S since in all these games, increasing the minimal
payoff comes at high costs for other relatively poor players. Hence, the
C&R model is also a simplification that can lead to misleading predictions
in games with many players, and in these games, generalizations such as
C&S will be more accurate.
If we look again at the consistency across games (see figure 2), we see
that a relative high share of subjects (14.3 percent) decides consistently
with quasi-maximin preferences in all games. Since efficiency concerns
and maximin preferences always coincide in these games, however, the
data are biased in their favor since each subject who cares for one of these
motives or any combination of them would choose consistently with both
of them in all games.
While the results reported so far are largely in favor of C&S, at least
one of our games provides evidence against C&S (see again table 1). If
x = 0, then by choosing C instead of B, the dictator only affects the high-
est payoff, and 35.2 percent chose this option. This could be driven by
competitiveness and by envy. As we find very little evidence in favor of
competitiveness in general, envy seems to be the driving motive here.
The arguably most interesting result of our experiment concerns the pre-
valence of selfishness. Previous experiments have indicated that increasing
the social distance leads to an increase in selfish behavior in standard dicta-
tor games. Although the social distance in an Internet experiment is quite
high—and in this experiment, the participants were further removed from
the experimenters since the marketing institute served as a buffer30 —we
find a comparatively high number of nonselfish choices. For example, when
we isolate selfishness, less than 20 percent of subjects choose accordingly,
and in seven out of sixteen distinct three-player games, the majority of
choices violates strict selfishness. Furthermore, only 10 percent of subjects

distribution.
Figure 2
298
Distribution of Subjects According to the Number of Five-Person Games in Which Their Behavior
Is Consistent with Each of the Following Motives: Competitiveness (Cmp), Efficiency (Eff), Envy
(i.e., FS [Env]), Generosity (i.e., FS [Gen]), Inquality Aversion According to the Bolton and
Ockenfels (2000) Model (Iav), Maximin Preferences (Mxm), and Selfishness (Slf)
consistency 5 person games

70
60
50 Cmp
Eff
40 Env
Gen
30 Iav
# of subjects
Mxm
distribution.
20 Slf
10
0
0 1 2 3 4 5 6 7 8
Cmp 47 25 38 32 33 10 14 12 6
Eff 48 28 26 29 24 10 8 13 31
Env 47 25 38 32 33 10 14 12 6
Gen 20 36 50 45 24 21 10 10 1

Iav 47 18 38 39 58 14 2 0 1
Mxm 48 28 26 29 24 10 8 13 31
Slf 4 9 15 41 61 33 9 12 33
consistency with motive (0=never, 8=always)
Note: Efficiency concerns and maximin preferences coincide in all games.

made a choice consistent with selfishness in all ten three-player games

(22 percent in eight or more games, 15 percent in all eight five-player
games). Our experiment even underestimates the share of subjects who
would be willing to sacrifice their own payoff to satisfy their distributional
preferences since in many cases, their narrow self-interest certainly coin-
cided with their distributional preferences. The frequent violation of narrow
self-interest probably results from the fact that the costs were small com-
pared to the changes the dictator could cause in other participants’ payoffs.
Previous results that suggest that with high social distance, the majority of
subjects become perfectly selfish, appear to be driven by relatively high
costs of giving.31
A Generalized Quasi-Maximin Model
The results of three-player dictator games are overall in favor of C&R.

Tests with more players, however, revealed that the quasi-maximin model
is too simple as subjects are not willing to reduce the payoffs of other rela-
tively low-income subjects substantially to increase the minimal payoff a
bit. C&S capture this by assuming concavity of the utility function both in
the dictator’s as well as other persons’ payoffs. We consider here an alter-
native generalization of the linear quasi-maximin model that takes the
payoff ranking explicitly into account.
Consider a dictator game with n players with a countable set of possi-
ble allocations (this is hardly a restriction and is only necessary to order
the allocations, which eases the notation). Order the payoffs to different
players for each allocation in descending order such that for allocation r,
xri ≥ xrk if k > i: Note that this implies that in different allocations r; s; pay-
off xri ; xsi can refer to different players since, for example, different players
might be the highest payoff subject in different allocations. Since we
assume dictators to be concerned exclusively with the distribution of the
payoffs without feeling special sympathy with respect to specific player
‘‘names,’’ this is not problematic.32 As the experiments of C&S show, the
linear quasi-maximin model is problematic. Hence, we assume the dicta-
tor’s utility function to be (weakly) concave in his or her own payoff.33
Let dr be the position of the dictator in allocation r after ordering the pay-
offs. The utility of the dictator from allocation r is then assumed to be
X
n
Ud ðx r
Þ = uðxrdr Þ + gi xri ;
i=1

distribution.
where g1 ≤ g2 ≤ ::: ≤ gn−1 ≤ gn and u0 ≥ maxf0; − g1 g, u00 ≤ 0.34 Note that

the dictator’s own payoff also appears in the sum. Hence, for a dictator
who is completely guided by social concerns and treats himself or herself
just like any other person, u = 0.35
This model can capture pure selfishness, g1 = ::: = gn = 0; pure maxi-
min preferences, g1 = ::: = gn−1 = 0; gn > 0; pure efficiency concerns,
g1 = ::: = gn > 0; quasi-maximin preferences, 0 < g1 = ::: = gn−1 < gn ; and
various versions of competitiveness (the latter may take forms where a dicta-
tor wants to increase his or her own share at the expense of all other players
or only of relatively well-off players), g1 ≤ g2 ≤ ::: ≤ gn−1 ≤ gn ≤ 0 and
g1 < 0. Generalized quasi-maximin preferences would correspond to 0 ≤
g1 ≤ g2 ≤ ::: ≤ gn−1 ≤ gn , with at least one inequality strict.36
Although the model also captures preferences that are altruistic toward
relatively poor players and at the same time competitive toward relatively
rich players, g1 ≤ g2 ≤ ::: ≤ gn − 1 ≤ gn and g1 < 0 < gn , it does not capture
inequality aversion. In the B&O model, the relative position of the other
players’ payoffs is irrelevant, as only the relative payoff of the dictator
matters, so all weights should be equal, but whether they are positive or
negative would depend on the relative payoff of the dictator. To include
the F&S model as a special case, one would also have to take the dic-
tator’s position into account—that is, the F&S model corresponds to
g1 = ::: = gdr −1 ≤ 0 ≤ gdr +1 = ::: = gn .37 Here, however, we assume that
the weights gi are independent of the dictator’s position in the ranking,
and hence the model does not include general versions of inequality aver-
sion either. Our model can capture inequality aversion in two-player
games by assigning weights g1 < 0 < g2 . Already with three players,
however, it assumes that whether the dictator is altruistic or competitive
toward the intermediate-payoff player is independent of whether the dicta-
tor has the highest or lowest payoff of the three players. The amount the
dictator would pay to help or hurt the intermediate player would, however,
change since the utility function is concave in the dictator’s own payoff.
Contrary to inequality aversion, however, if the dictator pays something
to harm the intermediate-payoff player when he or she is the low-payoff
player, the dictator would pay even more (or at least as much) if he or she
was the high-payoff player.
The model does not imply that the dictator’s altruism or competitive-
ness is independent of his or her position. Since one weight applies to the
dictator’s own payoff, if he or she has another payoff rank, the dictator’s
concern for others’ payoffs might change. For example, a dictator who has

distribution.
pure maximin preferences becomes perfectly selfish if he or she has the

lowest payoff.
In contrast to C&S, this model allows for preferences that are generally
altruistic but envious toward the richest player(s), which would be consis-
tent with the observed behavior in the game in table 1. Furthermore, it
appears unintuitive that C&S are insensitive to the ranking of payoffs. For
illustration, assume that a dictator has $100 and can increase a recipient’s
payoff who already has $20. Assume, furthermore, that there are two more
players, who receive $x, and that the dictator cannot affect their payoff.
C&S now predict that the dictator’s willingness to pay to increase the reci-
pient’s payoff is independent of x. We consider this unintuitive and would
expect, as our model predicts, that the dictator would pay more to increase
the recipient’s payoff if, for example, x = 50, than if x = 2. On the other
hand, one might consider it unintuitive that, as our model (as well as
C&S) predicts, it is irrelevant whether x = 19 or x = 1. This is, however,
an empirical question, and we are unaware of clarifying evidence.
Naturally, this model in its general form can rationalize almost all
choices of dictators. Hence, without any restrictions on the parameters, it is
not useful to derive predictions for behavior in new situations. In particular,
if n increases, at some point, the number of free parameters becomes too
large. The model might, however, be a more practical starting point than
previous models. The way this model should be used is to let individual
players make a decision in a large set of dictator games that offer sufficient
variation in the payoffs and number of players. One can then estimate the
parameter vector for each player and try to detect frequent combinations
and general patterns. For example, it might prove not to be very restrictive
to assume that for n exceeding a certain threshold n (possibly of the order
about 5), we can fix n parameters and determine the remaining parameters
by linear interpolation. Similarly, one might detect that for many players,
only g1 and gn prove to be significantly different from the other parameters,
and hence a relatively small extension of quasi-maximin preferences would
work well.38
In contrast to previous approaches that started with a simple model and
then argued how the model could be extended to cover additional data,
this approach starts with a very general model and then narrows it down.
Moreover, our conditional logit model above suffers from collinearity pro-
blems, while this approach does not. Nevertheless, it allows us to distin-
guish between the crucial aspects of various motives. For example, the
crucial distinction between inequality aversion and efficiency concerns is
whether an increase in a richer person’s payoff increases or decreases

distribution.
one’s own utility. This can be easily assessed here with a conditional logit
that takes the other player’s payoffs as arguments.39
Even if the attempt to determine parameter distributions that would nar-
row down the above model to a more tractable one would not prove to be
fruitful, estimating the parameters of the model might still be useful to pro-
vide a deeper understanding of the dependence of distributional preferences
on subject pools, procedural details, and so on because variations could be
reflected in systematic changes of weights. For example, the preliminary
evidence suggests that economists have flatter weight schedules (i.e., their
weights on poor players relative to rich players are lower than for noneco-
nomists), and a random role assignment might also make schedules flatter.
Extending the scope beyond pure distributional games, if another player has
harmed the decision maker before, this would be expected to lead to a
decrease of the weight attached to this person (negative reciprocity).40 This
might again interact with different procedural aspects. Similarly, sharing
responsibility for the outcome appears to lower all weights on others’ pay-
offs. Such a multiparameter model where we understand the regularities
more and more might prove more useful than simple models that fail if their
distinctive characteristics are tested directly.
Econometric Test
For illustration, we test the generalized quasi-maximin model for the
five-person games in Engelmann and Strobel (2006). We run a conditional
logistic regression with the decision maker’s payoff as well as the payoffs
of the players ordered by their rank as independent variables.41 This model
does not take care of the statistical dependence of the eight decisions by
each subject, and hence the results should be taken with care and rather be
seen as an illustration. Moreover, this is not the approach that we would
consider the most fruitful to make use of the model (i.e., estimating para-
meters for individual subjects based on a large number of decisions by
each subject). Our Internet experiment was not designed to test this model
and hence does not provide enough data per subject, but it is still the rich-
est data set we have for a preliminary test.
The results are in table 3. We report odds ratios, with an odds ratio lar-
ger than 1 indicating that an increase in the respective payoffs leads to an
increase in the probability of the allocation to be chosen.42 The results are
to a large part consistent with generalized quasi-maximin preferences. As
expected, the dictator’s payoff has a clearly significant positive impact on
the probability of the allocation to be chosen. All payoffs except for the

distribution.
Table 3
Conditional Logistic Regressions for the Impact of the Payoffs
of the Decision Maker (Self) and the Other Persons on
the Propensity to Choose Certain Allocations in
the Five-Player Games in Engelmann and Strobel (2006)
Odds Ratio Standard Error z P > jzj [95% Confidence Interval]
Self 1.1383 0.0172 8.57 < 0.001 [1.1051, 1.1725]

x1 1.0067 0.0023 2.89 0.004 [1.0022, 1.0113]
x2 0.9892 0.0140 –0.77 0.442 [0.9622, 1.0170]
x3 1.0328 0.0138 2.41 0.016 [1.0061, 1.0603]
x4 1.0409 0.0153 2.73 0.006 [1.0114, 1.0713]
x5 1.0899 0.0159 5.89 < 0.001 [1.0591, 1.1216]
second highest have a significant positive impact, consistent with altruistic

concerns dominating competitive concerns. Furthermore, the odds ratios
are higher for the lower ranks, with the exception of the second highest,
consistent with a higher degree of altruism toward poorer players. The
odds ratio for the second highest ranked payoff is (insignificantly) smaller
than 1. This might be explained by the fact that in all but one of our games,
the dictator had the second highest rank,43 and hence the estimates for this
rank are driven by this game alone. This exercise illustrates that the pro-
posed model might be a good starting point for estimating distributional
concerns and their interactions with procedural aspects (in a broad sense,
e.g., including the choice of the subject pool) of the experiments. For the
three-person games, the results are clearly consistent with our model. The
odds ratios for self, x1 , x2 , and x3 are 1.202, 1.009, 1.055, and 1.156, respec-
tively, and all except the one for x1 are significantly larger than 1.44
Conclusion
Reviewing the evidence on purely distributional games, where distribu-

tional preferences should be unconfounded by reciprocity and strategic
concerns, we conclude that we know relatively little about distributional
preferences. This contrasts with their prominent role in models designed
to explain behavior in experiments. One might go as far as labeling this a
distribution paradox. There are nearly as many theories of human behavior
that only take the distribution of payoffs as arguments as there are distinct,
purely distributional games that have been used to test these.

distribution.
While some of the results are encouraging (i.e., the finding by A&M
that almost all subjects behave consistently with some utility function), the
same authors also find that subjects’ preferences are highly heterogeneous.
That alone would not be too much reason for concern as long as it were
possible to find robust estimates of the shares that decide consistently with
different motives. A review of the literature, however, reveals that such a
robust estimation seems difficult to achieve as the shares of subjects that
decide in line with different motives differ substantially across games, and
a large number of motives seem to matter at least in some games.
To further complicate matters, dictator experiments appear to be more
sensitive to procedures, subject pools, and further aspects than other experi-
ments. Consequently, preferences over distributions appear to be less robust
with respect to these issues than other considerations such as reciprocity or
strategic concerns. Apparently, for example, a subject’s willingness to share
with another subject decreases with larger social distance, but the desire to
punish unfriendly acts or reward friendly acts is less affected.45
The most successful model in explaining distributional choices seems
to be generalized maximin (i.e., altruistic preferences that assign higher
weights to the players lower in the payoff ranking). C&S capture this in
an elegant functional form. For a complete explanation, one needs, how-
ever, to factor in a small (5-10 percent) share of players who are competi-
tive, wanting to maximize their own relative payoff (which corresponds to
nonpositive weights in the generalized quasi-maximin model). There is
also evidence that in addition to the competitive subjects, a few players
like to reduce others’ payoffs just because the others are richer. This is
consistent with inequality aversion.46
It also seems that perfect equality can serve as a focal point and has
special appeal. When there is no reason to give an advantage to any person
and there are no substantial costs in terms of efficiency, a perfectly equal
allocation seems obviously attractive. When perfect equality is not an
option, the willingness of subjects to trade off other concerns (e.g., effi-
ciency or maximin) for a reduction in inequality seems to be reduced,47
although this issue awaits systematic investigation.48
To summarize, we know surprisingly little about distributional prefer-
ences. A large variety of motives appear to matter, and which of them
dominates is influenced by many aspects of the game and the experimental
design. While the impact of some of the factors is to be expected by econ-
omists (e.g., the introduction of double-blind procedures), the influence
of other factors is difficult to rationalize within an economic framework
(e.g., the availability of a perfectly equal split). Further research, exposing

distribution.
individual subjects to a large variety of games, should inform the formula-

tion of models that can capture the former aspects in a systematic way.
Capturing the latter aspects in a tractable formal model, however, appears
much more challenging.
Notes
1. The ultimatum game is a two-player game where the first mover, the proposer, suggests
a division of a fixed amount of money between himself and the second mover, the receiver. The
receiver can accept or reject. If she or he accepts, the proposal is implemented; if she or he
rejects, both players receive nothing. While the subgame-perfect equilibrium for rational selfish
players predicts that proposers will offer the receivers the minimal positive amount (or even
nothing) and receivers will accept all positive (or even all) offers, the very large set of ultima-
tum experiments shows that offers are substantially higher (and very often equal half of the pie)
and receivers frequently reject offers of less than 25 percent of the pie (see Camerer 2003).
2. In a slight abuse of notation, we will use the same abbreviation for groups of authors
as well as for their models or experimental studies where appropriate.
3. We understand reciprocity here as actions rewarding intentionally helpful actions
(positive reciprocity) and punishing intentionally hurtful actions (negative reciprocity).
4. Indeed, in his very comprehensive book, Camerer (2003) cites no purely distributional
experiment with more than two players, except the three-person dictator games by Frey and
Bohnet (1997).
5. Further papers attempt to isolate the effects of distributional concerns and reciprocity
by comparing treatments where second movers react to free choices of first movers to those
where first-mover choices are replaced by random draws (e.g., Charness 2004), or the strat-
egy space of player 1 is restricted such that he or she could not have acted in any friendlier
way (e.g., Bolton, Brandts, and Ockenfels 1998; Falk, Fehr, and Fischbacher 2003).
6. Extensions of these models that include negative reciprocity (Charness and Rabin
2002; Cox, Friedman, and Gjerstad forthcoming) allow for punishment of players if they have
behaved unfriendly before.
7. We will always refer to efficiency plainly as the sum of payoffs for all subjects.
8. The same holds for Fehr and Schmidt (1999 [F&S]) because b < 1, but it does not
hold in general for Bolton and Ockenfels (2000 [B&O]) as players might dislike advanta-
geous inequality enough to prefer to receive an intermediate payoff.
9. In an earlier dictator game (Kahneman, Knetsch, and Thaler 1986), the dictator could
only choose between an equal split of $20 or keeping $18 and giving the recipient $2. The
76 percent who chose the equal split are much higher than in other experiments, probably
because only one very biased alternative was available.
10. The linear utility function in F&S is only consistent with the corner-point choices,
except for b = 1=2. In contrast, the model of B&O cannot explain sending exactly half the
pie (at least if the strategy space is sufficiently fine).
11. Further increasing social distance seems to lower dictator giving only slightly further.
For example, recipients in Johannesson and Persson (2000) were randomly selected from the
Swedish adult population, and their allocations were mailed. Bohnet and Frey (1999a, 1999b)
and Charness and Gneezy (forthcoming) find that decreasing social distance significantly
increases dictator giving, but the latter find no such effect in ultimatum games.

distribution.
12. See Camerer (2003) for a detailed overview.

13. The purpose of this game is to get a (nearly) point estimate of the b parameter in F&S
to test for the predictive power of the model in various other games.
14. Kritikos and Bolle (2001) also find strong evidence in favor of efficiency concerns
and contrary to inequality aversion in two-player dictator games, where dictators choose
between payoff allocations that are similar to the options for responders in ultimatum games.
15. Competitiveness is understood as a desire to maximize one’s own relative payoff.
16. For a more detailed discussion of these experiments, see the extended survey on the
first author’s homepage that is based on a previous version of this article.
17. An early three-player dictator game was conducted by Kahneman, Knetsch, and Tha-
ler (1986), but dictators knew the choices of the two recipients in preceding two-player dicta-
tor games, so this game is clearly influenced by indirect reciprocity. Frey and Bohnet (1997)
studied three-player dictator games where the dictator could freely share a fixed sum of
money with two recipients. The focus of their study is the effect of communication.
18. The latter choices are also consistent with Cox and Sadiraj (2006 [C&S]) as disadvan-
tageous inequality is reduced by lowering the payoff of the high-income subject substantially
while increasing the payoff of the intermediate-income person. Alternatively, this behavior
can also be captured by a generalized quasi-maximin model that we discuss below.
19. This behavior is also consistent with C&S since a dictator, by demanding less, also
redistributes between the second dictator and the second receiver. In contrast, Charness and
Rabin (2002 [C&R]) predict that the decision should be the same, while F&S would even
predict that teams give less. The treatment effects are, however, rather weak.
20. This is similar to the ‘‘complicity effect’’ identified by Charness and Rabin (2002).
See also Camerer (2003).
21. In total, we paid 3,505 euros to 110 participants. We took the choice in one randomly
selected game for 20 randomly selected persons and paid them as well as 48 randomly
selected recipients. To control for effects of the mechanism, 14 additional subjects made only
one choice (all for the same game) and knew that this choice would be implemented for sure
(with 28 randomly selected recipients). Comparing their choices with those subjects having
faced the same choice as one of ten games yields no significant or substantial difference.
22. Our sample differs substantially from student subject pools. For example, 29 percent
did not have a college or university degree, 34 percent had children, and 28 percent were
forty years or older. Similarly, in C&R, the sessions that were run at Berkeley did not employ
economics students and strongly support their model.
23. In line with this interpretation, employees and law and medicine students that Fehr,
Naef, and Schmidt (forthcoming [FNS]) used in Zurich were a bit more efficiency minded
than the Munich noneconomists, who were primarily social sciences students. The difference
was, however, not significant.
24. In this context, it is also noteworthy that while FNS find significant differences between
economists and noneconomists, in only one of the games they investigate, the data show indeed
that the noneconomists choose the efficient allocation significantly less often than the subjects
in Engelmann and Strobel (2004 [E&S]). In the second game, their economists choose the effi-
cient allocation significantly more often than the E&S subjects, while the noneconomists do not
differ significantly from the E&S data. Hence, it is not clear from their results how representa-
tive the E&S data are for the population at large. Furthermore, there are some differences in
procedures to E&S. See Engelmann and Strobel (forthcoming) for a detailed discussion.
25. We restrict the analysis to the random payoff games because each subject only made
one choice in such a game. Hence, we can treat the choices as independent observations.

distribution.
Moreover, in the random payoff games, we have by design much more variation with respect
to the different motives, which reduces the impact of individual games.
26. The insignificance of the interaction effect may partly be due to the comparably low
number of economists (85) versus noneconomists (255). Of the subjects, 532 had ambiguous
backgrounds.
27. The motives are highly correlated, which makes the analysis sensitive to the exclusion
of certain motives. Due to a collinearity problem, we have to drop one variable. We excluded
selfishness here. Alternatively, as we did in E&S, we can include selfishness and replace the
FSa and FSb components by FSstrict = FSa + FSb, assuming equal weights on aversion
toward disadvantageous and advantageous inequality. In this case, we get no changes for
competitiveness, iav, maximin, and the interaction effect. Efficiency is still significant at
p = :02, but selfishness (p = :32) and FSstrict (p = :42) are not. Excluding FSb instead of
selfishness changes the level of significance for efficiency to p = :04.
28. In contrast, the high number of subjects who are consistent with generosity in seven
to nine games might well be driven by the fact that for all subjects, generosity and maximin
preferences have coincided for seven to nine out of the ten games.
29. Each participant faced four different games twice, with the only difference being how
the decision maker’s payoff varied across allocations.
30. Our experiments were double blind since we were not given participants’ names, and
subjects were informed about this in the instructions.
31. Charness, Haruvy, and Sonsino (forthcoming) also find a relatively high number of
nonselfish choices in an Internet experiment based on a lost-wallet game.
32. It would become an issue if we extended the model to capture further aspects such as
reciprocity because, for example, a player who has misbehaved would receive a lower weight
in all allocations, which requires keeping track of the player numbers in the sorting of payoffs
as well.
33. Probably assuming concavity in all players’ payoffs is more appropriate, but then the
model is untractable.
34. If the payoffs for two or more players are identical, the weight they receive should be
identical and equal to the mean of the corresponding general weights. This ensures continuity
of the utility function where two players’ payoffs are equal. The condition on u0 ensures that
a dictator who is competitive with respect to relatively rich players would not be willing to
reduce his or her own payoff if he or she became the richest player.
35. If a dictator has a higher payoff rank (but the same payoff), his or her marginal utility is
smaller since gi−1 ≤ gi . Together with the concavity of u, this guarantees that the dictator’s uti-
lity is concave in his or her own payoff. Furthermore, since the sum in Ud is unaffected by
swapping payoffs between two persons, the model preserves the egocentricity property of C&S.
36. C&R appear to have had such a model in mind—namely, that players care more for
others the lower their position is in the ranking of payoffs and consider quasi-maximin prefer-
ences as a simplification.
37. Generalized versions of F&S would allow for weak inequalities instead of equalities
in this expression.
38. Alternatively, one could try to derive the parameters from a more general model that
has fewer parameters. For example, altruistic preferences that favor relatively poor others could
be captured by a model that suggests maximization of a function uðxi Þ + WE, where W is the
total payoff and E a measure for the equality of the distribution. A sensible measure would be
Pn 2ðj − 1Þ
W− x
j = 1 ðn − 1Þ j
E = 1 − G, with G the Gini coefficient, which amounts here to G = W . This

distribution.
2ðj − 1Þ
would yield parameters gj = ðn − 1Þ , and hence, for four-person games, g4 = 2, g3 = 43, g2 = 23,
and g1 = 0. With these parameters, the model would, for example, be consistent with the major-
ity of decisions in experiments 2 and 3 of C&S.
39. If the position of the decision maker in the payoff ranking changes across games, then
there is no straightforward prediction of inequality aversion toward players who rank above
the decision maker in some games and below her or him in others. There is, however, such a
prediction toward the highest payoff subject.
40. Charness and Rabin (2002) introduce negative reciprocity in a similar way.
41. In each particular game, this implies that the dictator’s payoff enters twice, once as
her or his own payoff and once as the payoff of the player with rank dr . Since the dictator’s
rank varies across games, we can still identify the impact of the dictator’s payoffs as well as
those of all ranked persons separately.
42. While the odds ratios obviously differ from the weights in the utility function, they
would reflect the structure (i.e., a larger odds ratio corresponds to a larger weight, and an odds
ratio larger than 1 corresponds to a positive weight).
43. The second game with this ranking that each subject faced was the same game with
different incentives. Hence, the trade-offs between motives other than selfishness were essen-
tially the same.
44. Since we estimate here the model across all subjects, the result that the odds ratio for
x1 is close to 1 indicates that comparable numbers of decision makers are altruistic and
envious toward the highest payoff person.
45. Another issue might be that in dictator games, subjects suspect that the recipients do not
exist if social distance is increased, while they are less likely to suspect this in a strategic game.
46. The apparently good performance of the inequality aversion models might be due to a
bias in the sample of games that have been studied in the past. In almost all the literature,
whenever negative reciprocity can play a role, it coincides with inequality aversion. In con-
trast, if reciprocity and inequality aversion make opposite predictions, inequality aversion
does poorly.
47. Perfect equality already seems attractive in terms of numbers. Given that humans tend
to like symmetric shapes (e.g., in faces), an equal distribution seems a natural focal point on
a much more primitive level than concerns for others’ payoffs. Once the perfectly symmetric
beautiful distribution is removed from the choice set, the mathematical, esthetical arguments
in favor of the equal split are irrelevant, and whether the most equal allocation is chosen
depends only on the trade-off between concerns for equality and other motives.
48. Güth, Huck, and Müller (2001) find clear effects of the availability of an equal split in
ultimatum games.
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Dirk Engelmann is a professor at Royal Holloway, University of London. He received his

doctorate in economics at Humboldt University, Berlin. His research is largely experimental
and has covered fairness preferences, perception biases, and market behavior.
Martin Strobel is an assistant professor at the University of Maastricht, The Netherlands. He

received his doctorate in economics at Humboldt University, Berlin. He applies experimental
methods to a large variety of topics, most notably fairness preferences and prediction markets.

distribution.

Engelmann Strobel

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Public Finance Review

Keywords: income distribution; Internet experiments; experimental

he classical economic model of the selﬁsh rational decision maker

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Prominent Models on Distributional Preferences

The prominent purely distributional models fall into two categories:

Hence, in B&O, subjects like the average payoff to be as close as possi-

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Furthermore, players are assumed to be egocentric, meaning that, all

Previous Evidence from Pure Distribution Games

Evidence from the Classic Dictator Game and Its Variants

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Positive giving is consistent with altruism (in particular, maximin prefer-

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aversion coincides either with maximin preferences (if advantageous

Evidence from Multiplayer Dictator Games

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A Large-Scale Experiment That Systematically

Based on E&S, we conducted an Internet experiment using a larger set

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logging off and on again. Furthermore, we got detailed biographic data on

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we isolate B&O-type inequality aversion or competitiveness, they do very

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Competitiveness 1.0874 0.0617 1.48 0.140 [0.9730, 1.2152]

that very few subjects appear to be driven by a single dominant motive

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consistency 3 person games

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with ai ≥ 1 that F&S assume in order to explain various experimental

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consistency 5 person games

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Note: Efﬁciency concerns and maximin preferences coincide in all games.

made a choice consistent with selﬁshness in all ten three-player games

A Generalized Quasi-Maximin Model

The results of three-player dictator games are overall in favor of C&R.

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where g1 ≤ g2 ≤ ::: ≤ gn−1 ≤ gn and u0 ≥ maxf0; − g1 g, u00 ≤ 0.34 Note that

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pure maximin preferences becomes perfectly selﬁsh if he or she has the

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Self 1.1383 0.0172 8.57 < 0.001 [1.1051, 1.1725]

second highest have a signiﬁcant positive impact, consistent with altruistic

Reviewing the evidence on purely distributional games, where distribu-

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individual subjects to a large variety of games, should inform the formula-

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12. See Camerer (2003) for a detailed overview.

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Dirk Engelmann is a professor at Royal Holloway, University of London. He received his

Martin Strobel is an assistant professor at the University of Maastricht, The Netherlands. He

Downloaded from http://pfr.sagepub.com at Universiteit Maastricht on November 18, 2007

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