infonet-economy

Individuals sort into and out of economic environments based on their preferences and in response
to relative prices. We demonstrate the importance of such sorting for the measurement of social
preferences, using two laboratory experiments. First, allowing subjects to avoid environments in
which sharing is possible significantly reduces sharing. This reveals the existence of a type of
individual who shares reluctantly, preferring to avoid the opportunity to share. Second, after
subsidizing the sharing environment, the aggregate amount shared increases, but less is shared, on
average, by those who enter. Thus, subsidies intended to induce more sharing have weak effects
since they attract those who share the least.