10.1177/0486613404272330Review of Radical Political Economics / Winter 2005Carpenter / Endogenous Social Preferences Endogenous Social Preferences

A long-standing discussion in economics asks whether institutions affect people’s social predisposi-tions. The current experiment tests whether different aspects of markets affect people’s social prefer-ences. The results are that people are less socially minded in more anonymous settings. Additionally, market competition erodes social preferences through two mechanisms. First, market competition en-courages opportunistic behavior, and second, the market institution itself decreases the other-regardingness of the participants. JEL classification: C72; C92; D6