Motivated by Others' Preferences? An Experiment on Imperfect Empathy

People care about others. But how do they assess the utility of others when making other-regarding decisions? Do they apply their own preferences or do they adopt the preferences of the other person? We study this question in a laboratory experiment where subjects in the role of senders can pay money to avoid harm arising to receivers. In a first step, we elicit all subjects’ willingness to pay (WTP) for not having to eat food items containing dried insects. We then show senders the WTPs of receivers and repeat the elicitation procedure, but now with receivers having to eat the food items and senders stating their WTPs to spare the receivers from having to eat them. We find that not only receivers’ preferences matter for decisions but also senders’ own preferences, a phenomenon for which we use the term imperfect empathy. In motivating prosocial transfers, senders’ and receivers’ WTPs act as complements by reinforcing each other. Conversely, pairs of sender and receiver who are dissimilar generate lower transfers than others. Since transfers usually benefit receivers more than they cost senders, we also find that dissimilarity within pairs reduces welfare. Our results complement the extensive literature on prosocial preferences, which so far abstracts from heterogeneous valuations. The implications might be far-reaching. For public welfare systems, e.g., systematic differences in consumption preferences between net payers and recipients could undermine public support.