Behavioral Economics of Preferences, Choices, and Happiness by Shinsuke Ikeda Hideaki Kiyoshi Kato Fumio Ohtake & Yoshiro Tsutsui

Author:Shinsuke Ikeda, Hideaki Kiyoshi Kato, Fumio Ohtake & Yoshiro Tsutsui
Language: eng
Format: epub
Publisher: Springer Japan, Tokyo

3 Experimental Design, Questionnaire, and Data Collection

3.1 Hypothetical Discrete Choice Question: Social Average Task

First we explain the experimental paradigm in the survey, using the example of a benchmark experiment called the social average task. The methods described for the social average task are representative of the methods for all the tasks we conducted in our study. We discuss the results of the other two tasks in Sect. 6 and provide detailed explanations of their experimental settings and empirical results in the Appendix because of space constraints.

The Easterlin paradox, which suggests that “increasing the income of society as a whole will not increase the well-being of anyone,” has been discussed in the literature on experienced utility that considers how national average income acts as a driving force of relative utility effects. The social average task provides a useful alternative method for investigating the validity of the paradox and relative utility effects in general. The merits of our method are that subjects recognize that they are competing with the Japanese social average when making choices and that the economic situations are explicitly shown to them.

Before the subjects began responding to repeated choice questions, they were shown an instruction screen displaying the following:

The following figures show your hypothetical monthly income (before tax). Also displayed in the same figure is Japan’s overall average monthly income (before tax). Suppose that these are current situations of your monthly income (before tax) and Japan’s overall average monthly income (before tax).

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