Social preference is to discuss the relationship between you and others. This is a very popular but also a very complex phenomenon.
Social preferences: Simply put, it is how you treat others. Neoclassical Economics (Mainstream Economics) Assume that everyone is selfish and only cares about their own interests (selfishness, people will not be punished for themselves, heaven and earth will be destroyed). Therefore, I actually don’t care about others. So as long as I am not affected, I will not be good to others or be bad to others, and I will not use others or hurt others. Our care and help for acquaintances (such as friends, roommates, etc.), Neoclassical economics also believes that this is because you still have to get along with each other (looking down and not seeing each other), and you hope to gain help from others by helping others. Therefore, in essence, it is to do altruistic behavior for your own interests (to achieve a balance of mutual benefit), rather than caring about him from the bottom of your heart. And when you only have a one-time chance to deal with others, you will not show such altruistic behavior. behavioral economics found that in real one-time interpersonal communication, people still care about others' help, which is a purely social preference choice. Therefore, in actual situations, people are not as selfish as assumed by neoclassical economics. Even if you are indifferent to passers-by A and B, most people will care about their parents, friends, children, and even poor people they don’t know.
So, in what way can people care about others? In real life, if someone offends you, you will hold a grudge against him; if your leader praises you, you will feel encouraged. Even if he does not give you a salary, you may work hard to repay his kindness. You may trust others, and you may not want to live up to their trust. All these very complex motivations and phenomena are collectively called social preferences. The three main social preferences are: 1. Altruism and fairness preferences; 2. Trust and reciprocity; 3. Social image.
Altruism and unfair dislike
Altruism: 6th edition Modern Chinese dictionary , it was originally a Buddhist term, giving others convenience and benefits without seeking rewards. Altruism is exactly the opposite of infringement. It is difficult to altruism when time is tight, and it is a pro-social behavior. From his sociobiological point of view, it is an instinct for animals to exchange for the existence and continuation of species through individual self-sacrifice. From the perspective of social normative theory, altruism is a social exchange, and its benefits are the increase of self-worth and the decrease of anxiety. Interactive norms are the basic principle of social exchange.
Fair: Public means public, refers to everyone, and equality means equality, which means equal existence for everyone. Fairness means handling things reasonably and not favoring one party or one person, that is, everyone involved in social cooperation bears the responsibilities he should bear and get the benefits he deserves. It is a sociological term. In law, fairness is one of the basic values pursued by law (order, fairness, and personal freedom are the three basic values of the legal system). Fairness is actually a whitewashing of transactions. What is transaction? The exchange of interests between each other for some reason is called transactions ("Principles of Economics" Adam Smith ).
Social fairness is the reasonable and equal distribution of the political, economic and other interests of society among all members of society. It means equality of rights, reasonable distribution, equality of opportunities and justice. Society needs fairness, because people cannot survive without society, and social development is also inseparable from human development. Fairness can mobilize individual enthusiasm, everyone can do their jobs, do their best, and get what they want, and jointly promote the sustainable development of society. If there is no fairness, it will bring about interpersonal problems, economic problems, and affect long-term social stability.
The famous "Dictator game" in behavioral economics is used to measure people's degree of altruism. Altruistic tendencies are generally associated with people's donations in real life.The dictator game experiment is improved by ultimatum game. If you are a selfish person, you will give it a little for strategic reasons, and if you have an altruistic tendency or care about fairer distribution, you will give it more. The ultimatum game is used to measure people's dislike of injustice (the distributor speculates about other people's perception of injustice, what kind of distribution is fair), that is, how much people are willing to sacrifice their own interests in pursuit of fairness.
ultimatum game (ultimatum game): proposed by Guth, professor of economics at Humboldt University, Berlin, Germany. In this game, two participants allocated a sum of money according to the experimental requirements, and one of them, as the proposer, has the right to actively choose the proposal, that is, how much money is given to the opponent. Another participant, as the responder (responder), could decide whether to accept or reject. If accepted, the money is actually distributed according to the proposal's suggestion; if rejected, the two parties have nothing (not worrying about lack of weight and inequality). For example: Two people ask for 100 yuan, and one person is greedy and plans to give himself 80 yuan and 20 yuan to his opponent. The opponent was very angry when he saw such an unfair distribution. So he refused the distribution, but in the end he was useless and neither of them could get a single point. Let’s take another example: two people ask for 100 yuan, one person is quite just, and he plans to give 50 yuan each to himself and his opponent. The opponent expressed satisfaction. So he accepted the distribution, and in the end both sides received 50 yuan each.
Different societies have different perceptions of fairness, and there is a very significant factor that affects people's perception of fairness. Research has found that the higher the degree of "marketization" society, the higher the degree of disgust of unfairness. This suggests that market-oriented transactions themselves may assist in the creation of the concept of fairness.
The real impact of altruism: In real life, altruism is often one of the motivations used to explain many public policy. For example, personal income tax , a portion of the tax will be transferred to low-income people; medical insurance hopes to help those with low-income people without insurance. There are many reasons for the design of all these policies, and one of the important motivations is that people think this is a more fair concept. Secondly, the charitable donation industry mainly relies on altruism.
The impact of unfair disgust is wider: in macroeconomics , there is a very important concept called price stickiness. People find that prices are actually not adjusted very timely like model predictions, so many problems will arise. One of the explanations is that people are very sensitive to whether the price is fair or not. If you want to raise the price, consumers will think it is unfair and therefore don’t buy this product. Or in the work situation, we all know that the longer you work, your salary will slowly increase. But in fact, if you measure people's work efficiency, especially when you are about to reach retirement age, your work efficiency will be reduced. If you follow the model strictly, your salary should drop when you are about to retire. But because people's disgust with the loss of unfairness, they will think that if you have worked for that long and I will give you a low salary, it is unfair. Therefore, you can see that wages in real life are gradually increasing, and there are almost very few drops. This can explain why the wage mechanism of a company is not a profit-maximizing wage.
Behavioral economics research shows that many times people do not only care about their own interests, but will show complex social preferences. Altruism and unfair aversion in social preferences have proven to be widespread and affect people's economic behavior.
