Testing (beliefs about) social preferences: Evidence from an experimental coordination game

We report experimental results on a simple coordination game in which two players can coordinate either on an equal distribution of payoffs or on a Pareto superior but unequal distribution of payoffs. We find that the higher the difference in individual payoffs, the less likely is a successful coordination on the Pareto superior distribution. While this is well in line with the recent models of inequity aversion, our results are best explained not by a preference for equality per se but rather by the belief that the opponent has such a preference.