Behavioral Game Theory

The basic idea behind social value orientation (SVO) is to gain a snapshot of someone's social preferences. Are they selfish and simply do the best for themselves without caring about the payoff of others? Are they competitive and want to earn more than others (even if that means sacrificing own payoff)? Are they inequality averse and want to earn the same as others? Or are they pro-social and want to maximize the payoff of others? SVO is a tool most closely associated with social psychology, but there is no doubt that it has a useful role to play in economics. A contribution that should be particularly interesting to economists is a recent meta-analysis published in the European Journal of Personality by Jan Luca Pletzer and co-authors. The analysis provides evidence on the connection between SVO, beliefs and behavior, which could feed into debates around reciprocity and psychological game theory. But I'm not going to talk about that study yet. Instead, I will do a co