Putting Social Preferences into Context Separating Monetary and Socio-Psychological Incentives*

Common models of social preferences usually assume the existence of a preference for other-regarding behavior / equal sharing. And, apart from this preference being potentially idiosyncratic in strength, qualifications are at most made informally on conferences when empirical deviations from predictions are explained by contextual variables. Starting from this observation, we present a simple framework which allows us to model “social preferences” in a game theoretic which explicitly separates economic incentives from potential social (context) effects. Moreover, we discuss and exemplify how the framework can be used to empirically study the effect of contextual variables as well as the influence of subject characteristics on the sensitivity to such variables.