Public Choice 119: 91–117, 2004. © 2004 Kluwer Academic Publishers. Printed in the Netherlands. 91 Modeling other-regarding preferences and an experimental test ∗ NORMAN FROHLICH 1 , JOE OPPENHEIMER 2 & ANJA KURKI 3 1 I.H Asper School of Business, University of Manitoba, Winnipeg, Manitoba, Canada R3T 5V4; e-mail: frohlic@ms.umanitoba.ca; 2 Department of Government & Politics, University of Maryland, College Park, MD 20742, U.S.A.; e-mail: joppenheimer@gvpt.umd.edu; 3 Department of Government & Politics, University of Maryland, College Park, MD 20742, U.S.A.; e-mail: akurki@gvpt.umd.edu Accepted 9 February 2003 Abstract. Behavior inconsistent with self-interest has been observed in many contexts. We argue that models designed to cope with these anomalies are inadequate to deal with a variety of social values. Our extension of the Fehr & Schmidt ‘inequity aversion’ model is applied to results from dictator experiments in which the money to be divided is generated by the efforts of paired individuals in either one or two rooms. This production leads to sharing behavior qualitatively different from that found in other dictator experiments. The pattern of sharing can be explained by entitlements, equity, and the credibility of the experiment. 1. Introduction The self-interest assumption, that choices depend only on one’s own interests, has done yeoman service in economics and the other social sciences. From Adam Smith to Gary Becker it has been the lynch-pin of many models of human behavior. The assumption simplifies and clarifies arguments won- derfully. But there has always been a problem. Everyday observation and common sense reveal countless acts of seemingly unselfish behavior among friends, family, and even casual strangers. Other-regarding behavior is often prevalent. This paper is about other-regarding behavior. The study of other-regarding behavior has been advanced by the development of experimental techniques ∗ Catherine Eckel was generous in sharing her research protocols for the standard dictator experiments with us and Gary Charness and an anonymous referee provided a number of helpful suggestions. We are thankful for the financial support of the Social Sciences and Hu- manities Research Council of Canada, the University of Maryland, and the National Science Foundation, Grant #01523490. Versions of this paper were presented at the 2001 International ESA Meetings in Barcelona, Spain in June 2001 and at the IXth International Social Justice Conference, University of Skövde, Sweden. The Barcelona paper contains some technical theoretical material which seemed out of place for this paper but is available on the web at www.bsos.umd.edu/gvpt/oppenheimer/research. Protocols for the experiments discussed in this paper are also available at the web site.