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Conspicuous generosity

Author

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  • Ellingsen, Tore
  • Johannesson, Magnus

Abstract

We develop a simple model of generous behavior. It is based on the premise that some people are generous, but everyone wants to appear generous—especially in the eyes of other generous people. Although non-monetary donations are always inefficient, they frequently occur in equilibrium because they facilitate signaling. The model helps to explain the prevalence of volunteering, the nature of Christmas gifts, and the taboo against paying cash in return for friendly favors. Finally, and perhaps most notably, the model explains why it is so common to ask for non-monetary favors and so uncommon to ask for money.

Suggested Citation

  • Ellingsen, Tore & Johannesson, Magnus, 2011. "Conspicuous generosity," Journal of Public Economics, Elsevier, vol. 95(9), pages 1131-1143.
    • Handle: RePEc:eee:pubeco:v:95:y:2011:i:9:p:1131-1143
    DOI: 10.1016/j.jpubeco.2011.05.002
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    Keywords

    Altruism; Non–monetary gifts; Volunteering;
    All these keywords.

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General

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