Social preference

1. What kind of economic preference can explain when a neighbor wins the lottery, the car consumption of non-winning neighbors increases (Kuhn et al. 2011)? Elaborate potential mechanism.
2. Describe the procedure of a trust game/dictator game/ultimatum bargaining game.
3. Explain economic mechanisms that can explain peer effects.
4. Explain why we care about whether observed correlation in peer performance is causal or not.