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Employing a two-by-two factorial design that manipulates whether dictator groups are single or mixed-sex and whether procedures are single or double-blind, we examine gender effects in a standard dictator game. No gender effect was found in any of the experimental treatments. Moreover, neither single- versus mixed-sex groups nor level of anonymity had any impact on either male or female behavior.

Migration is a human capital investment in which parents bear costs and children share returns. Therefore, migrants from a population with heterogeneous intergenerational discount rates will self-select on intergenerational altruism. Intergenerational altruism and fertility are arguably linked, therefore immigrants might self-select on eventual fertility. Soviet Jews who migrated to Israel despite high migration costs averaged almost one child more than members of the same birth cohorts who migrated later, at lower cost. Distinguishing selection from treatment effects using mothers' age at migration, selection accounts for most of that difference (the proportion varies with specification), even with controls for religion and religiosity. Selection on fertility may have other explanations, including cultural preservation. To probe, we conduct an alternative empirical test of immigrant selection on altruism, finding that U.S. immigrants spend more time with grandchildren than do natives. Additionally, immigrant self-selection on fertility provides an alternative explanation for Chiswick's (1978, Journal of Political Economy86(5), 897–921) earnings-overtaking result.

Charities typically ask potential donors repeatedly for a donation. These repeated requests might trigger avoidance behavior. Considering that, this paper analyzes the impact of offering an ask avoidance option on charitable giving. In a proposed utility framework, the avoidance option decreases the social pressure to donate. At the same time, it induces feelings of gratitude toward the fundraiser, which may lead to a reciprocal increase in donations. The results of a lab experiment designed to disentangle the two channels show no negative impact of the option to avoid repeated asking on donations. Instead, the full model indicates a positive impact of the reciprocity channel. This finding suggests that it might be beneficial for charities to introduce an ask avoidance option during high-frequency fundraising campaigns., CEPA Discussion Papers; 38

Why do individuals volunteer their time even when recipients receive far less value than the donor’s opportunity cost? Previous models of altruism that focus on the overall impact of a gift cannot rationalize this behavior, despite its prevalence. We develop a model that allows for differential warm glow depending on the form of the donation. In a series of laboratory experiments that control for other aspects of volunteering, such as its signaling value, subjects demonstrate behavior consistent with the theoretical assumption that gifts of time produce greater utility than the same transfers in the form of money. Subjects perform an effort task, accruing earnings at potentially different wage rates for themselves or a charity of their choice, with the ability to transfer any of their personal earnings to charity at the end of the experiment. Subjects exhibit strong preferences for donating time even when differential wage rates make it costly to do so. The results provide new insights on the nature of volunteering and gift giving. Data, the online appendix, and the experimental instructions are available at https://doi.org/10.1287/mnsc.2017.2951 . This paper was accepted by Teck-Hua Ho, behavioral economics.

With Big Data, decisions made by machine learning algorithms depend on training data generated by many individuals. In an experiment, we identify the effect of varying individual responsibility for the moral choices of an artificially intelligent algorithm. Across treatments, we manipulated the sources of training data and thus the impact of each individual's decisions on the algorithm. Diffusing such individual pivotality for algorithmic choices increased the share of selfish decisions and weakened revealed prosocial preferences. This does not result from a change in the structure of incentives. Rather, our results show that Big Data offers an excuse for selfish behavior through lower responsibility for one's and others' fate.

This paper tests the external validity of a simple Dictator Game as a laboratory analogue for a naturally occurring policy-relevant decision-making context. In Uganda, where teacher absenteeism is a problem, primary school teachers' allocations to parents in a Dictator Game are positively but weakly correlated with their time allocations to teaching and, so, negatively correlated with their absenteeism. Guided by a simple theoretical model, we find that the correlation can be improved by allowing for (a) variations in behavioural reference points across teachers and schools and (b) the positive effect of some School Management Committees on teacher attendance.

This paper examines the motivation for intergenerational transfers between adult children and their parents, and the nature of preferences for such giving behaviour, in an experimental setting. Participants in our experiment play a series of dictator games with parents and strangers, in which we vary endowments and prices for giving to each recipient. We find that preferences for giving are typically rational. When parents are recipients as opposed to strangers, participants display greater sensitivity to the price of giving, and a higher relative proclivity for giving. Our findings also provide evidence of reciprocal motivations for giving, as players give more to parents who have full information regarding the context in which giving occurs.

A considerable and increasing share of foreign aid stems from private donations. Hence, individual donors can increase social welfare in developing countries by directing their funds to the most effective NGOs. Surprisingly few studies have analyzed whether private donors care about aid effectiveness when they donate to an international charity. In a laboratory experiment, we investigate if private donors seek information about the exact impact of their donation to an international NGO before they donate. Furthermore, we investigate how relevant private donors find information about aid impact compared to information about administrative costs, and the recipient type who benefits from a donation. First, we find that a relatively small share of individuals makes a well-informed donation decision. Second, the demand for information about aid impact is lowest, and it is highest for information about the recipient type. Third, exact information about aid impact did not lead to a significant change in average donation levels, while information about the exact recipient type and administrative costs led to a significant change in donation levels. In the recipient type group, informed participants donated significantly more than uninformed participants because they “rewarded” the preferred recipient with higher-thanaverage transfers. In the administration costs group, informed participants donated significantly less than uninformed participants because they used the information to “punish” NGOs with high administration costs.

Dynastic models common in macroeconomics use a single parameter to control the willingness of individuals to substitute consumption both intertemporally, or across periods, and intergenerationally, or across parents and their children. This article defines the concept of elasticity of intergenerational substitution (EGS), and extends a standard dynastic model in order to disentangle the EGS from the EIS, or elasticity of intertemporal substitution. A calibrated version of the model lends strong support to the notion that the EGS is significantly larger than one. In contrast, estimates of the EIS suggests that it is at most one. What disciplines the identification is the need to match empirically plausible fertility rates for the U.S. We illustrate the potential role of the EGS in macroeconomics.

We study the fair allocation of a one-dimensional and perfectly divisible good when individuals have other-regarding preferences. Assuming no legitimate claims and purely ordinal preferences, how should society measure social welfare so as to satisfy basic principles of efficiency and fairness? We define the egalitarian equivalent as the size of the egalitarian allocation which leaves the individual indifferent to the current allocation. In two simple models of average and positional externalities, we characterize the class of social preferences which give full priority to the individual with the lowest egalitarian equivalent in the economy.

Phenomena like meat sharing in hunter-gatherers, self-sacrifice in intergroup conflicts, and voluntary contribution to public goods provision in laboratory experiments have led to the development of numerous theories on the evolution of altruistic in-group beneficial behavior in humans. Many of these theories abstract away from the effects of kinship on the incentives for public goods provision, though. Here, it is investigated analytically how genetic relatedness changes the incentive structure of that paradigmatic game which is conventionally used to model and experimentally investigate collective action problems: the linear public goods game. Using recent anthropological data sets on relatedness in 61 contemporary hunter-gatherer and horticulturalist societies the relevant parameters of this model are then estimated. It turns out that the kinship patterns observed in these societies substantially reduce the negative effect of increasing group size on incentives for public goods provision. It is suggested, therefore, that renewed attention should be given to inclusive fitness theory in the context of public goods provision also in sizable groups, because its explanatory power with respect to this central problem in the evolution of human cooperativeness and altruism might have been substantially underrated. JEL: B15, C72, D64, H41

We augment a standard allocation experiment to investigate whether, and to what extent, individuals are willing to limit others’ choices and change their own choices concerning an environmental project when they are given responsibility for others’ decisions. We observe the allocator's own donation, the donation he chooses for his group (including himself), and the minimum donation he requires the other group members to make. We find that donations dictated to the whole group are, on average, lower than individual donations and consistent with the allocator's beliefs about what the other group members donate. Additionally, we observe that most allocators force the others to donate a positive, though low, amount. Thus, unlimited freedom of choice is rejected by the majority of the participants.

In this study, we investigate how and why people discriminate among different groups, including their in-group and multiple out-groups. In a laboratory experiment, we use dictator games for five groups to compare actual transfers to in-group and out-group agents with the respective beliefs held by dictators and recipients in these groups. We observe both in-group favoritism and discrimination across multiple out-groups. Individuals expect others to be in-group biased, as well as to be treated differently by different out-groups. We find that dictators’ in-group favoritism is positively related to the degree of in-group favoritism they expect other dictators to exhibit. Moreover, we find that a dictator tends to be relatively more generous toward a specific out-group when he or she expects that dictators belonging to that out-group are generous toward members of his or her in-group. Thus, our study provides evidence for indirect reciprocation expectation.

This paper offers the first instrumental variables estimates of the wage returns to volunteer experience. The returns are substantial and differ considerably by gender. The results imply that the unequal valuation of volunteer experience by gender is more important in explaining the gender earnings gap than is the unequal valuation of part-time paid work experience. The results also indicate negative selection into unpaid work. In a simple model of optimal volunteering, negative selection implies that a lower cost of volunteering would produce both an expanded and higher-skilled pool of volunteers, and greater societal benefits from volunteer work.

We test how donors respond to new information about a charity's effectiveness. Freedom from Hunger implemented a test of its direct marketing solicitations, varying letters by whether they include a discussion of their program's impact as measured by scientific research. The base script, used for both treatment and control, included a standard qualitative story about an individual beneficiary. Adding scientific impact information has no effect on whether someone donates, or how much, in the full sample. However, we find that amongst recent prior donors (those we posit more likely to open the mail and thus notice the treatment), large prior donors increase the likelihood of giving in response to information on aid effectiveness, whereas small prior donors decrease their giving. We motivate the analysis and experiment with a theoretical model that highlights two predictions. First, larger gift amounts, holding education and income constant, is a proxy for altruism giving (as it is associated with giving more to fewer charities) versus warm glow giving (giving less to more charities). Second, those motivated by altruism will respond positively to appeals based on evidence, whereas those motivated by warm glow may respond negatively to appeals based on evidence as it turns off the emotional trigger for giving, or highlights uncertainty in aid effectiveness.

The use of directed giving – allowing donors to target their gifts to specific organizations or functions – is pervasive in fundraising, yet little is known about its effectiveness. We conduct a field experiment at a public university in which prospective donors are presented with either an opportunity to donate to the unrestricted Annual Fund, or an opportunity of donating to the Annual Fund and directing some or all of their donation towards the academic college from which they graduated. While there is no effect on the probability of giving, donations are significantly larger when there is the option of directing. However, the value of the option does not come directly from use, as very few donors choose to direct their gift.

This paper shows that a firm’s objectives can extend beyond profit maximization. I use data from a for-profit firm offering charity auctions of celebrities belongings whose donations affect both revenues and costs. Comparing actual donations with the profit-maximizing benchmark indicates that the firm donates in excess of profitmaximization. I provide additional evidence pointing to donations as a further objective of the firm. Also, donations do not substantially increase willingness to pay, indicating that demand cannot explain expenditures in CSR. My results shed light on the functioning of benefit corporations and open questions on the competitive conduct of non-profit maximizing companies.

This paper studies the effect of the commonly used phrase “thanks in advance” on compliance with a small request. In a controlled laboratory experiment we ask participants to give a detailed answer to an open question. The treatment variable is whether or not they see the phrase “thanks in advance.” Our participants react to the treatment by exerting less effort in answering the request even though they perceive the phrase as polite.

This paper studies how the request for a favor has to be devised in order to maximize its chance of success. We present results from a mini-dictator game, in which the recipient can send a free-form text message to the dictator before the latter decides. We find that putting effort into the message, writing in a humorous way and mentioning reasons why the money is needed pays off. Additionally, we find differences in the behavior of male and female dictators. Only men react positively to efficiency arguments, while only women react to messages that emphasize the dictator’s power and responsibility.

We randomly vary religious identity salience in laboratory subjects to test how identity salience contributes to six hypothesized links from prior literature between religious identity and economic behavior. We find that religious identity salience makes Protestants increase contributions to public goods. Catholics decrease contributions to public goods, expect others to contribute less to public goods, and become less risk averse. Jews more strongly reciprocate as an employee in a bilateral labor market gift-exchange game. We find no evidence of religious identity salience effects on disutility of work effort, discount rates, or generosity in a dictator game.

This paper shows that when donors and recipients care about each other --two-sided altruism -- the presence of asymmetry of information about the donor's income leads very naturally to a signaling game. A donor who cares about the recipient's welfare has incentives to appear richer than he is when the recipient cares about him. Similarly, asymmetry of information regarding the donor's income generates a signaling game in the presence of two-sided altruism. These signaling games put upward pressure on transfers and this pressure increases with the altruism of the recipient.

Non-monetary rewards are frequently used to promote pro-social behaviors, and these behaviors often result in approval from one’s peers. Nevertheless, we know little about how peer-approval, and particularly competition for peer-approval, influences people’s decisions to cooperate. This paper provides experimental evidence suggesting that people in peer-approval competitions value social approval more when it leads to unique and durable rewards. Our evidence suggests that such rewards act as a signaling mechanism, thereby contributing to the value of approval. We show that this signaling mechanism generates cooperation at least as effectively as cash rewards. Our findings point to the potential value of developing new mechanisms that rely on small non-monetary rewards to promote generosity in groups.

Using data from the World Values Survey and the European Values Study, we compare the trends of materialism over the last quarter of century among the US and six major European countries: France, Spain, Italy, Germany, Great Britain and Sweden. We use the definition of materialism adopted by positive psychologists. We find that the trends in Europe and in the US diverged. In the US materialism increased, while in Europe it decreased. However, some mixed patterns arise. In particular, Great Britain, Spain and Sweden showed some symptoms of an increase of materialistic values, although they were far less pronounced compared to the American ones. As far as the levels of materialism are concerned, it is interesting that, according to most of our measures, Americans were relatively less materialistic at the beginning of our period of observation. Yet, towards the end of the period they scored very high in the ranking of materialism in our sample of countries.

Charities often circulate widespread donation appeals, but who is most likely to donate and how do appeals impact the well-being of individual donors and non-donors, as well as the entire group exposed to the campaign? Here, we investigate three factors that may influence donations (recent winnings, the presence of another person, and matched earnings) in addition to the changes in affect reported by individuals who donate in response to a charitable opportunity and those who do not. Critically, we also investigate the change in affect reported by the entire sample to measure the net impact of the donation opportunity. Results reveal that people winning more money donate a smaller percentage to charity, and the presence of another person does not influence giving. In addition, large donors experience hedonic boosts from giving, and the substantial fraction of large donors translates to a net positive influence on well-being for the entire sample.

There are numerous situations in which people ask for something or make a request, e.g. asking a favor, asking for help or requesting compliance with specific norms. For this reason, how to ask for something in order to increase people’s willingness to fulfill such requests is one of the most important question for many people working in various different fields of responsibility such as charitable giving, marketing, management or policy making. This dissertation consists of four chapters that deal with the effects of small changes in the decision-making environment on altruistic decision-making and compliance behavior. Most notably, written communication as an influencing factor is the focus of the first three chapters. The starting point was the question how to devise a request in order to maximize its chance of success (Chapter 1). The results of the first chapter originate the ideas for the second and third chapter. Chapter 2 analyzes how communication by a neutral third-party, i.e. a text from the experimenters that either reminds potential benefactors of their responsibility or highlights their freedom of choice, affects altruistic decision-making. Chapter 3 elaborates on the effect of thanking people in advance when asking them for help. While being not as closely related to the other chapters as the three first ones are, the fourth chapter deals as well with the question how compliance (here: compliance with norms and rules) is affected by subtle manipulations of the environment in which decisions are made. This chapter analyzes the effect of default settings in a tax return on tax compliance. In order to study the research questions outlined above, controlled experiments were conducted. Chapter 1, which analyzes the effect of text messages on the decision to give something to another person, employs a mini-dictator game. The recipient sends a free-form text message to the dictator before the latter makes a binary decision whether or not to give part of her or his endowment to the recipient. We find that putting effort into the message by writing a long note without spelling mistakes increases dictators’ willingness to give. Moreover, writing in a humorous way and mentioning reasons why the money is needed pays off. Furthermore, men and women seem to react differently to some message categories. Only men react positively to efficiency arguments, while only women react to messages that emphasize the dictator’s power and responsibility. Building on this last result, Chapter 2 attempts to disentangle the effect of reminding potential benefactors of their responsibility for the potential beneficiary and the effect of highlighting their decision power and freedom of choice on altruistic decision-making by studying the effects of two different texts on giving in a dictator game. We find that only men react positively to a text that stresses their responsibility for the recipient by giving more to her or him, whereas only women seem to react positively to a text that emphasizes their decision power and freedom of choice. Chapter 3 focuses on the compliance with a request. In the experiment, participants are asked to provide a detailed answer to an open question. Compliance is measured by the effort participants spend on answering the question. The treatment variable is whether or not they see the text “thanks in advance.” We find that participants react negatively by putting less effort into complying with the request in response to the phrase “thanks in advance.” Chapter 4 studies the effect of prefilled tax returns with mostly inaccurate default values on tax compliance. In a laboratory experiment, participants earn income by performing a real-effort task and must subsequently file a tax return for three consecutive rounds. In the main treatment, the tax return is prefilled with a default value, resulting from participants’ own performance in previous rounds, which varies in its relative size. The results suggest that there is no lasting effect of a default value on tax honesty, neither for relatively low nor relatively high defaults. However, participants who face a default that is lower than their true income in the first round evade significantly and substantially more taxes in this round than participants in the control treatment without a default., Es fallen einem zahlreiche Situationen ein, in denen Menschen um etwas bitten, sei es um Unterstützung oder um das Befolgen bestimmter Regeln oder Normen. Die Frage, wie man eine Bitte formulieren muss, um die Bereitschaft der Menschen zu erhöhen, diese Bitte zu erfüllen, ist daher eine äußerst wichtige für viele Menschen, die in ganz unterschiedlichen Bereichen arbeiten, beispielsweise in Hilfsorganisationen, im Marketing, im Management oder auch in der Politikberatung. Diese Dissertation besteht aus vier Kapiteln, die sich mit den Auswirkungen kleiner Veränderungen in der Entscheidungsumgebung auf altruistische Entscheidungen sowie unterstützendes und regelkonformes Verhalten befassen. Schriftliche Kommunikation als Einflussfaktor steht hierbei im Mittelpunkt der ersten drei Kapitel. Ausgangspunkt war die Frage, wie man eine Bitte formulieren muss, um ihre Erfolgsaussichten zu erhöhen (Kapitel 1). Aus den Ergebnissen des ersten Kapitels resultieren die Ideen für das zweite und dritte Kapitel. In Kapitel 2 wird untersucht, wie sich Kommunikation durch einen neutralen Dritten - ein Text der Experimentatoren, der potenzielle Wohltäter entweder an ihre Verantwortung oder ihre Entscheidungsfreiheit erinnert - auf eine altruistische Entscheidung auswirkt. In Kapitel 3 wird analysiert, was für einen Effekt es auf die Hilfsbereitschaft von Teilnehmern hat, wenn man ihnen bereits im Voraus für ihre Unterstützung dankt. Obwohl das vierte Kapitel weniger eng mit den anderen Kapiteln verbunden ist, als es die ersten drei sind, geht es auch hier um die Frage, wie sich die Bereitschaft der Teilnehmer, Normen zu befolgen, durch kleine Änderungen der Entscheidungsumgebung erhöhen lässt. In diesem Kapitel wird untersucht, welchen Einfluss vorausgefüllte Steuererklärungen auf die Steuerhinterziehung haben. Zur Beantwortung der oben genannten Forschungsfragen wurden Experimente durchgeführt. In Kapitel 1 wird ein Mini-Diktatorspiel verwendet, um herauszufinden, welchen Effekt Textnachrichten auf die Entscheidung haben, einer anderen Person etwas abzugeben. Die Person in der Rolle des Diktators liest eine vom Empfänger geschriebene Nachricht, bevor sie oder er die binäre Entscheidung trifft, einen Teil der Anfangsausstattung an den Empfänger abzugeben. Unsere Ergebnisse zeigen, dass Diktatoren eher bereit sind, etwas abzugeben, wenn sich die Empfänger beim Schreiben der Nachricht bemüht haben, indem sie längere Nachrichten mit weniger Rechtschreibfehlern schreiben. Außerdem erhöhen humorvolle Nachrichten und welche, die Gründe nennen, wofür die Empfänger das Geld brauchen, die Bereitschaft der Diktatoren, Geld abzugeben. Darüber hinaus scheinen Männer und Frauen auf einige Nachrichteninhalte unterschiedlich zu reagieren. Nur Männer reagieren positiv auf Effizienzargumente, während nur Frauen auf Nachrichten reagieren, die die Macht und Verantwortung des Diktators unterstreichen. Aufbauend auf diesem letzten Ergebnis versucht das zweite Kapitel, die Effekte der Betonung der Entscheidungsmacht und der Betonung der Verantwortung auf altruistisches Handeln zu trennen. Hierzu wird der Effekt von zwei Texten auf Entscheidungen im Diktatorspiel untersucht. Die Ergebnisse zeigen, dass nur Männer positiv auf die Betonung ihrer Verantwortung reagieren, während Frauen tendenziell mehr abgeben, wenn ihre Entscheidungsmacht und Entscheidungsfreiheit hervorgehoben wird.

This study investigates whether individuals engage in prosocial behavior when it requires an investment of their time, but not money. In a laboratory experiment with rigorous anonymity arrangements, senders receive their payoff at the beginning. They may then engage in a tedious task to increase the earnings of exogenously disadvantaged recipients who otherwise receive no earnings. We find that senders are willing to sacrifice time to benefit recipients. Whether or not the recipient is present in the laboratory during the working time does not alter this decision. However, in a treatment variation some senders also display antisocial behavior.

People trade favors when doing so increases efficiency. Will they when it reduces efficiency, such as in political logrolling? We introduce the “Stakeholder Public Bad” game, in which common fund contributions increase one person's earnings (the “Stakeholder”) while reducing others’ earnings and overall efficiency. The Stakeholder position rotates through all group members or just alternates among two people (making it easier to form a coalition). High Stakeholder rewards provide a lever for reciprocity: if someone contributes when another is Stakeholder, he may be rewarded with a gift when he becomes Stakeholder. Reciprocity is only possible when agents know others’ roles and actions, so information provision may be pro- or anti-social. In a laboratory experiment, we combine a rotating or alternating asymmetry in payoffs with varying levels of information provision to examine pro- and anti-social reciprocity. We find that subjects in the Stakeholder role willingly sacrifice social welfare. We also see both anti-social and pro-social favor trading, particularly when coalition-forming is easier. Favor trading does not change the mean level of public bad provision. People who trade favors tend to be less risk averse.

Pay-What-You-Want (PWYW) pricing schemes are becoming increasingly popular in a wide range of industries. We develop a model incorporating self-image into the buyer's utility function and introduce heterogeneity in consumption utility and image-sensitivity, which generates different purchase decisions and optimal prices across individuals. When a good is sold at a fixed price higher than a threshold value, a price that the individual thinks is fair, the adoption of PWYW increases his utility and hence results in a weakly higher purchase rate. When a good is sold at a fixed price lower than this threshold, however, PWYW can lead to a lower utility. This may result in a lower purchase rate and higher average price, in line with previously unexplained evidence from field experiments. Moreover, an increase in the threshold value decreases the buyer's utility and may further lower the purchase rate, possibly resulting in a further increase in purchase price. Using simple assumptions of quadratic self-image function and uniformly distributed individual preferences, we investigate the conditions under which PWYW yields higher total welfare.

To better understand how support for redistributive policies is shaped by macroeconomic shocks, we explore how distributional preferences changed during the recent “Great Recession.” We conducted identical modified dictator games during both the recession and the preceding economic boom. The experiments capture subjects' selfishness (the weight on one's own payoff) and equality–efficiency tradeoffs (concerns for reducing differences in payoffs versus increasing total payoffs), which we then compare across economic conditions. Subjects exposed to recession exhibit greater selfishness and higher emphasis on efficiency relative to equality. Reproducing recessionary conditions inside the laboratory by confronting subjects with possible negative payoffs [weakly] intensifies selfishness and increases efficiency orientation, bolstering the interpretation that differing economic circumstances drive our results.

This article contributes to the debate on the link between reciprocal motives of employees and HRM practices by studying the behavioral effects of intra-firm trainings on absence behavior and turnover probability. We apply the gift-exchange framework and offer a behavioral perspective that helps to explain why firms invest in trainings that provide mainly general skills. We argue that employees may reciprocate the gift of firm-sponsored training with higher levels of costly effort or commitment. We employ a stringent methodological approach based on panel data of a large multinational firm and find that, in contrast to human capital predictions, general trainings lead to a decrease in turnover rates. Most notably, we find the strongest effect for employees with the lowest levels of firm tenure. This is a quite novel result as this group should face the lowest separation costs, for instance, due to the accumulation of firm-specific human capital. Hence, intra-firm trainings are an important retention devic...

Under what conditions do distributional preferences, such as altruism or a concern for fair outcomes, generate efficient trade? I analyze theoretically a simple bilateral exchange game: each player sequentially takes an action that reduces his own material payoff but increases the other player's. Each player's preferences may depend on both his/her own material payoff and the other player's. I identify two key properties of the second-mover's preferences: indifference curves kinked around “fair” material-payoff distributions, and materials payoffs entering preferences as “normal goods.” Either property can drive reciprocity-like behavior and generate a Pareto efficient outcome. (JEL C78, D63, D64)

We develop a simple theory which formally describes how charities can resolve the information asymmetry problems faced by small donors by working with large donors to generate quality signals. To test the model, we conducted two large-scale natural field experiments. In the first experiment, a charity focusing on poverty reduction solicited donations from prior donors and either announced a matching grant from the Bill and Melinda Gates Foundation, or made no mention of a match. In the second field experiment, the same charity sent direct mail solicitations to individuals who had not previously donated to the charity, and tested whether naming the Bill and Melinda Gates Foundation as the matching donor was more effective than not identifying the name of the matching donor. The first experiment demonstrates that the matching grant condition generates more and larger donations relative to no match. The second experiment shows that providing a credible quality signal by identifying the matching donor generates even more and larger donations than not naming the matching donor. Importantly, the treatment effects persist long after the matching period, and the quality signal is quite heterogeneous--the Gates' effect is much larger for prospective donors who had a record of giving to "poverty-oriented" charities. These two pieces of evidence support our model of quality signals as a key mechanism through which matching gifts inspire donors to give.

Increasing punishment is typically considered first choice to boost deterrence of unwarranted behavior such as false financial statements, asset misappropriation, stealing, or corruption. However, if there is uncertainty on a potential violator’s guilt, judges’ and juries’ willingness to impose punishment may decrease in its magnitude. Thus, increasing the magnitude of punishment may backfire, when the reduced punishment probability is anticipated by potential violators. Based on a theoretical model, our paper is the first to analyze the interdependency of violation and punishment behavior in a laboratory experiment, and to contrast it to the standard partial equilibrium perspective on deterrence that considers the punishment probability to be independent of the fine size. Varying both the magnitude of fines and the degree of uncertainty shows that, in case of legal uncertainty, the deterrent effect of higher fines is far less pronounced than if the punishment probability was exogenous.

Employees are more willing to work and put effort in for an employer that genuinely promotes the greater good. Some are also willing to give up part of their compensation to contribute to a social cause they share. Being able to attract a motivated workforce is particularly important for the public sector, where performance is usually more difficult to measure, but this goal remains elusive. Paying people more or underlining the career opportunities (as opposed to the social aspects) associated with public sector jobs is instrumental in attracting a more productive workforce, while a proper selection process may mitigate the negative impact on intrinsic motivation.

We present evidence from a natural field experiment designed to shed light on the efficacy of alternative fundraising schemes. In conjunction with the Bavarian State Opera House, we mailed 25,000 regular opera attendees a letter describing a charitable fundraising project organized by the opera house. Recipients were randomly assigned to six treatments designed to explore behavioral responses to fundraising schemes varying in two dimensions: (i) the presence of a lead donor; (ii) whether and how individual donations would be matched using the lead donation. We provide reduced form evidence from the field experiment on the causal impact of each fundraising scheme on the extensive and intensive margins of giving. We then develop and estimate a structural model of giving behavior that simultaneously estimates individual responses on both margins. We utilize the structural model to predict giving behavior in counterfactual fundraising schemes. The evidence suggests the optimal fundraising scheme is one in which the charitable organization merely announces the existence of a significant and anonymous lead donor, and does not use the lead donation to match donations in any way, be it through linear matching, non-linear matching, threshold matching, or some combination of the three. We conclude by discussing evidence from a follow-up field experiment designed to probe further the question why lead donors are effective.

We run between-subject dictator games with exogenously specified “give” or “take” frames involving a balanced pool of male and female dictators and constant payoff possibilities. We find the following: Females allocate more under the taking frame than under the giving frame. Males allocate more under the giving frame than under the taking frame. In the taking frame females are more generous than males. But in the giving frame both are equally generous. Finally, when the combined population of males and females is considered, giving is found to be equivalent to “not taking,” because the opposing gender effects offset each other.

Which preference underlies giving in dictator games? To date, the experimental evidence has either been interpreted as a preference over the distribution of payoffs, or as an experimenter demand effect. We show that under strict dictator-dictator as well as strict dictator-recipient anonymity, giving in dictator games springs from a preference over the distribution of decision rights. In contrast, concerns which trigger experimenter demand (Andreoni and Bernheim 2009) are negatively correlated with dictator game giving. Our experiments cover a series of dictator game variants which have sparked the experimenter demand debate. In addition, we identify the sets of ethical ideals that dictators employ to derive the 'right' course of action in a formal moral judgement test and model dictator transfers econometrically by means of dictators' actual ethical ideals. Our results explain the lion's share of results from the literature: lower transfers when dictators earn the pie (Cherry et al. 2002); lower transfers when 'take' options are available (List 2007; Bardsley 2008); lower transfers when anonymity is lifted (Hoffmann et al. 1994); generous dictators consistently preferring to avoid the game altogether, if given the option (Lazear et al. 2012), and findings that social norms and beliefs cause dictator transfers (Krupka and Weber 2013; Di Tella et al. 2015; Kimbrough and Vostroknutov 2015).

A large economics literature seeks to understand the reasons why individuals make charitable contributions. Fundamental features of most models of charitable giving are the inclusion of externalities induced by other agents and the Lancasterian characteristics approach to specifying utility functions. This paper develops a general, revealed-preference methodology for testing a variety of preference structures that allow for both externalities and characteristics. The tests are simple linear programs that are transparent, computationally efficient, and straightforward to implement. We show how the technique applies to standard models of privately provided public goods and novel models that account for other-regarding preferences based on relative consumption and donations among individuals. We also conduct an original experiment that enables testing and comparing many models on a single data set. Our experiment design allows us to focus on intrinsic motivations which are often hard to disentangle from other extrinsic or image effects in field data. The results provide the first revealed-preference evidence on the importance of social comparisons when individuals make charitable contributions. Models that include preferences for either relative consumption or donations yield significantly greater explanatory power than the standard model of impure altruism.

One explanation of altruism is that it arises from “mentalizing,” the process of understanding the mental states of others. Another is based on sexual selection: altruism is a costly signal of good genes. This paper shows that these two arguments are stronger together in that altruists who can mentalize have a greater advantage over nonaltruists when they can signal their type, even though these signals are costly, when such signaling allows better matching opportunities. Finally, it shows how mentalizing leads to higher payoffs for both partners in a long-term relationship, modeled as a repeated game with private monitoring. (JEL C73, D64, D82)

A body of literature suggests that ethnic heterogeneity limits economic growth. This article provides microeconometric evidence on the direct effect of ethnic divisions on productivity. In team production at a plant in Kenya, an upstream worker supplies and distributes flowers to two downstream workers, who assemble them into bunches. The plant uses an essentially random rotation process to assign workers to positions, leading to three types of teams: (i) ethnically homogeneous teams, and teams in which (ii) one or (iii) both downstream workers belong to a tribe in rivalry with the upstream worker’s tribe. I find strong evidence that upstream workers undersupply non-coethnic downstream workers (vertical discrimination) and shift flowers from non-coethnic to coethnic downstream workers (horizontal discrimination), at the cost of lower own pay and total output. A period of ethnic conflict following Kenya’s 2007 election led to a sharp increase in discrimination. In response, the plant began paying the two downstream workers for their combined output (team pay). This led to a modest output reduction in (i) and (iii) teams—as predicted by standard incentive models—but an increase in output in (ii) teams, and overall. Workers’ behavior before conflict, during conflict, and under team pay is predicted by a model of taste-based discrimination. My findings suggest that interethnic rivalries lower allocative efficiency in the private sector, that the economic costs of ethnic diversity vary with the political environment, and that in high-cost environments firms are forced to adopt “second best” policies to limit discrimination distortions.

There is a widespread belief that peer effects are important in charitable giving, but surprisingly little evidence on how donors respond to their peers. We analyse a unique dataset of donations to online fundraising pages to provide evidence on the direction and magnitude of peer effects – we find that a £10 increase in the mean of past donations increases giving by £3.50, on average. We also explore potential explanations for why peers matter. We find no evidence that donations provide a signal of charity quality, nor any role for fundraising targets. Our preferred explanation is that donors benchmark themselves against the distribution of donations from their peers.

This paper presents a model in which anonymous charitable donations are rationalized by two human tendencies drawn from the psychology literature. The first is people's disproportionate disposition to help those they agree with while the second is the dependence of peoples' self-esteem on the extent to which they perceive that others agree with them. Government spending crowds out the charity that ensues from these forces only modestly. Moreover, people's donations tend to rise when others donate. In some equilibria of the model, poor people give little because they expect donations to come mainly from richer individuals. In others, donations by poor individuals constitute a large fraction of donations and this raises the incentive for poor people to donate. The model predicts that, under some circumstances, charities with identical objectives can differ by obtaining funds from distinct donor groups. The model then provides an interpretation for situations in which the number of charities rises while total donations are stagnant.

Donating blood, “the gift of life,” is among the noblest activities and it is performed worldwide nearly 100 million times annually. The economic perspective presented here shows how the gift of life, albeit noble and often motivated by altruism, is heavily influenced by standard economic forces including supply and demand, economies of scale, and moral hazard. These forces, shaped by technological advances, have driven the evolution of blood donation markets from thin one-to-one “marriage markets,” in which each recipient needed a personal blood donor, to thick, impersonalized, diffuse markets. Today, imbalances between aggregate supply and demand are a major challenge in blood markets, including excess supply after disasters and insufficient supply at other times. These imbalances are not unexpected given that the blood market operates without market prices and with limited storage length (about six weeks) for whole blood. Yet shifting to a system of paying blood donors seems a practical impossibility given attitudes toward paying blood donors and concerns that a paid system could compromise blood safety. Nonetheless, we believe that an economic perspective offers promising directions to increase supply and improve the supply and demand balance even in the presence of volunteer supply and with the absence of market prices.

An altruistic agent who may aid a person with a low income may induce that person to exert little effort to increase his income. Such behavior generates a Good Samaritan Dilemma, in which welfare is lower than when no one is altruistic. Governmental transfers, which restrict reallocation from a person who saves much to one who saves little, reduce the effect, and can lead to an outcome which is Pareto-superior to the outcome under a Nash equilibrium with no government taxation and transfers.

In this paper we give a survey of recent work on game theory devoted to modeling decision making under bounded rationality. An agent's deviation from rational choice understood as maximization of gain can be caused by moral principles (religious beliefs, altruism, patriotism), emotions (envy, wrath, shame, regret, or guilt) or simply by an attempt to comply with several criteria not reducible to a single one. In the first part of the survey we consider the behavior of agents subject to temptation, perfectionists, and persons susceptible to self-deceit.

We provide the second mover in a trust game and a moonlighting game with an excuse for not reciprocating. While this type of manipulation has been shown to strongly reduce giving in the dictator game, we find that the availability of the excuse has no effect on the incidence of reciprocal behavior in these games. Our results cast doubt on the generalizability of previous dictator game findings and suggest that image concerns are not a key driver of reciprocal behavior. (JEL C72, D64, Z13)

A small but growing body of literature uses overlapping generations (OLG) models to study environmental policy for long-lived problems such as climate change. An OLG model, unlike the infinitely lived representative agent model, distinguishes between impatience with respect to one¡¯s own future utility, and attitudes toward successors' utility. I discuss the problem of time inconsistency, the role of Markov perfection, and show that a class of OLG models can be studied using methods developed to analyze models of non-constant discounting. An example illustrates the techniques and determines the conditions underwhich, in equilibrium, there is under-investment or over-investment in natural capital.

Is voluntary work a pathway channeling transition for school to work, or from inactivity to activity, or rather a top up activity for those already employed? The paper aims to identify trends in the voluntary work in Romania as against EU countries, to profile the persons engaged in voluntary work, as well as to analyze the way the profile changed over time. Also, the article emphasizes the work related values of those involved in voluntary works. We base our analyses on the date sets of European Value Survey for the period 1990-2008 (three rounds). The survey is based on probabilistic samples that are representative for the population aged 18+ years old.

Survey and register data indicate that many employees prefer a socially responsible employer and will accept a lower wage to achieve this. Laboratory experiments support the hypothesis that socially responsible groups are more productive than others, partly because they attract cooperative types, partly because initial cooperation is reinforced by group dynamics. Overall, the findings indicate corporate social responsibility may have cost advantages for firms.

Bonanno and Vickers (1988) show that vertical separation is profitable and is of interest to manufacturers collectively, as well as individually, provided that the franchise fees can be used to extract the retailers¡¦ surplus. However, their analysis is derived within the goods market only, and hence ignores the harm caused to the community by the double marginalization. This paper develops a simple endogenous growth model with monopolistic competition, in which both structures of vertical integration and vertical separation can be described, and finds that vertical separation reduces both the balanced growth rate and the social welfare.