Abstract
We show that, if giving is equivalent to not taking, impure altruism could account for List’s (in Journal of Political Economy 115(3):482–493, 2007) finding that the payoff to recipients in a dictator game decreases when the dictator has the option to take. We examine behavior in dictator games with different taking options but equivalent final payoff possibilities. We find that recipients tend to earn more as the amount the dictator must take to achieve a given final payoff increases, a result consistent with the hypothesis that the cold prickle of taking is stronger than the warm glow of giving. We conclude that not taking is not equivalent to giving and agree with List (in Journal of Political Economy 115(3):482–493, 2007) that the current social preference models fail to rationalize the observed data.
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Notes
Cappelen et al. (2013) report a similar finding.
We focus on List’s comparison of the baseline and the Take 5 settings. List also compares the baseline with a Take 1 setting and Bardsley compares three different pairs of settings. In all cases, the final results are similar.
The payoff to the recipient also decreases as the option to take increases. The recipient’s payoff tends to be lower in the Take 5 than in the Take 1 setting.
See Bardsley (2008), p. 125 for a formal proof.
A substantial number of results from both the laboratory and the field are consistent with the effect of warm glow giving. See Bolton and Katok (1998), Eckel et al. (2005), and Grossman and Eckel (2012) for examples of direct evidence from the laboratory on warm glow preferences and Landry et al. (2010) for evidence from a field experiment.
This modification does not affect the analysis of the impurely altruistic model in games where taking is not an option because N=0 and S=G.
Luccasen and Grossman (2013) also use the warm glow of not taking as a potential explanation of List’s finding and speculate that the warm glow is conditioned by the dictator’s reference point. They report that “the option to take makes people more comfortable giving less. Expanding the action set from giving only, to giving or taking alters the reference point (Grossman and Eckel 2012). When subjects can only give, then donating money to charity is the action that contributes to warm glow. When subjects can take money from charity, the act of not taking may be the action that contributes to warm glow, and thus dampens observed giving” (pp. 16–17).
See the excellent survey by Camerer (2003) for a discussion.
All three median paired differences are also significantly different from $0 at the 1 % level.
All three median paired differences are also significantly different from $0 at 1 % level.
Grossman and Eckel (2012) study giving to and taking from a charity in three cases—Self$20, Split$20, and Charity$20—that correspond, respectively, to our Scenarios 1, 6 and 9. The average earnings for the recipient are $3.56, $9.73 and $3.60 in their cases and $4.05, $5.61 and $6.31 in our scenarios. They find that the earnings for the recipient increase when comparing Self$20 and Split$20, just as we do. Surprisingly, however, they find no difference in the final amount received by the charity in the two extreme cases of Self$20 and Charity$20. Also, the earnings in Split#20 are much higher than those in Scenario 6. They suggest “ the initial even split acts, on average, as a strong focal point for our subjects” (p. 13).
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Acknowledgements
The authors gratefully acknowledge research support provided by NSF grant SES-0904695 to Razzolini, by NSF grant SES-1024357 to Korenok, and the VCU Presidential Research Incentive Fund to Millner. Any remaining errors are our own.
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Korenok, O., Millner, E.L. & Razzolini, L. Taking, giving, and impure altruism in dictator games. Exp Econ 17, 488–500 (2014). https://doi.org/10.1007/s10683-013-9379-3
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DOI: https://doi.org/10.1007/s10683-013-9379-3