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Economics, Gratitude, and Warm Glow

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Author Info

  • J. Atsu Amegashie

    ()
    (Department of Economics, University of Guelph)

Abstract

People feel a sense of gratitude when they receive gifts, transfers, or assistance. Based on psychological literature, I argue that gratitude is different from standard notions of reciprocity. Indeed, people derive utility from in-kind transfers (i.e., feel grateful), even if they do not like or do not consume the gift. This is because it is the thought that counts, so long as the donor made a genuine and sincere effort to make the recipient happy. I incorporate a sense of gratitude into preferences and use it to rationalize Andreoni (1989, 1990) warm-glow of giving. This addresses a critique of Andreoni’s model by Brekke, Kverndokk, and Nyborg (Journal of Public Economics, 2003). I am also able to explain the effect of social distance on the degree of redistribution, why government charitable donations may not crowd out private charitable contributions, the Keynesian effects of government debt, intrinsic motivation, donations to not-for-profit organizations and the practice of thanking anonymous referees in academia.

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Bibliographic Info

Paper provided by University of Guelph, Department of Economics and Finance in its series Working Papers with number 0601.

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Length: 19 pages
Date of creation: 2006
Date of revision:
Handle: RePEc:gue:guelph:2006-1

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Related research

Keywords: altruism; charity; gratitude; psychology; warm-glow.;

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References

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  1. Timothy Besley & Maitreesh Ghatak, 2005. "Competition and Incentives with Motivated Agents," American Economic Review, American Economic Association, vol. 95(3), pages 616-636, June.
  2. George A. Akerlof & Rachel E. Kranton, 2000. "Economics And Identity," The Quarterly Journal of Economics, MIT Press, vol. 115(3), pages 715-753, August.
  3. Harbaugh, William T., 1998. "What do donations buy?: A model of philanthropy based on prestige and warm glow," Journal of Public Economics, Elsevier, vol. 67(2), pages 269-284, February.
  4. Johan Lagerl–f, 2004. "Efficiency-enhancing signalling in the Samaritan's dilemma," Economic Journal, Royal Economic Society, vol. 114(492), pages 55-69, 01.
  5. Roland Benabou & Jean Tirole, 2003. "Intrinsic and Extrinsic Motivation," Review of Economic Studies, Wiley Blackwell, vol. 70(3), pages 489-520, 07.
  6. Andreoni, James, 1990. "Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving?," Economic Journal, Royal Economic Society, vol. 100(401), pages 464-77, June.
  7. Duncan, Brian, 2004. "A theory of impact philanthropy," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 2159-2180, August.
  8. Barro, Robert J, 1974. "Are Government Bonds Net Wealth?," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1095-1117, Nov.-Dec..
  9. Roberts, Russell D, 1984. "A Positive Model of Private Charity and Public Transfers," Journal of Political Economy, University of Chicago Press, vol. 92(1), pages 136-48, February.
  10. Andrew Caplin & John Leahy, 2001. "Psychological Expected Utility Theory And Anticipatory Feelings," The Quarterly Journal of Economics, MIT Press, vol. 116(1), pages 55-79, February.
  11. George A. Akerlof & Rachel E. Kranton, 2005. "Identity and the Economics of Organizations," Journal of Economic Perspectives, American Economic Association, vol. 19(1), pages 9-32, Winter.
  12. Francois, Patrick, 2000. "'Public service motivation' as an argument for government provision," Journal of Public Economics, Elsevier, vol. 78(3), pages 275-299, November.
  13. Matthew Rabin., 1992. "Incorporating Fairness into Game Theory and Economics," Economics Working Papers 92-199, University of California at Berkeley.
  14. Bernheim, B Douglas, 1986. "On the Voluntary and Involuntary Provision of Public Goods," American Economic Review, American Economic Association, vol. 76(4), pages 789-93, September.
  15. Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-58, December.
  16. Colin Camerer & George Loewenstein & Drazen Prelec, 2003. "Neuroeconomics: How neuroscience can inform economics," Levine's Bibliography 506439000000000484, UCLA Department of Economics.
  17. Warr, Peter G., 1982. "Pareto optimal redistribution and private charity," Journal of Public Economics, Elsevier, vol. 19(1), pages 131-138, October.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. HowTo: Altruism and the â??Warm Glowâ? effect
    by zooeygoethe in Economic Objectorvism on 2007-12-26 18:01:33
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Cited by:
  1. Michael Jones & Michael McKee, 2008. "Giving To Ingrates?," Working Papers 08-06, Department of Economics, Appalachian State University.
  2. Garofalo, Giuseppe & Morganti, Patrizio, 2010. "Il finanziamento degli investimenti in R&S. Gli effetti sulla crescita e sulla struttura finanziaria," MPRA Paper 23551, University Library of Munich, Germany.
  3. J. Atsu Amegashie, 2006. "Intentions and Social Interactions," Working Papers 0602, University of Guelph, Department of Economics and Finance.

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