Other-regarding preferences have supplanted pure egoism in many economic models, from labor economics (e.g. Demougin, Fluet and Helm, 2006) to optimal taxation (e.g. Choi, 2009). Two sets of empirical observations have precipitated this development. Firstly, behavior in games where decisions makers influence the earnings of others cannot be explained by egoism (see Fehr & Schmidt, 2006). Secondly, reported happiness appears to depend on relative as well as absolute income, the so-called Easterlin paradox (1974) (see Clark, Frijters and Shields, 2008).