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An experimental investigation of intrinsic motivations for giving

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  • Tonin, Mirco
  • Vlassopoulos, Michael

Abstract

This paper presents results from a modified dictator experiment aimed at distinguishing and quantifying the two intrinsic motivations for giving: warm glow and pure altruism. In particular, we implemented a within-subject experimental design with three treatments: (i) one, where the recipient is the experimenters, which measures altruistic feelings towards the experimenters (T1), (ii) the Crumpler and Grossman (2008) design in which the recipient is a charity, and the dictator's donation crowds out one-for-one a donation by the experimenters, which aims at measuring warm glow giving (T2), (iii) a third one, with a charity recipient and no crowding out, which elicits both types of altruism (T3). We use T1 to assess to what extent altruistic feelings towards the experimenters are a potential confound for measuring warm glow in T2. We find giving in T1 not to be significantly different from T2, suggesting that the Crumpler and Grossman test is an upper bound estimate of warm glow giving. We provide a lower bound estimate based on the behavior of subjects whose estimate of warm glow giving in T2 is not confounded, that is, those who do not display altruistic feelings towards the experimenters in T1. We use these two estimates to decompose giving in T3 into warm glow and pure altruism and find them to be almost equally important. We also propose a new method of detecting warm glow motivation based on the idea that in a random-lottery incentive (RLI) scheme, such as the one employed here, warm glow benefits accumulate and may lead to satiation, whereas purely altruistic motivation does not. Keywords; dictator game, warm glow, pure altruism, charitable giving

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Bibliographic Info

Paper provided by Economics Division, School of Social Sciences, University of Southampton in its series Discussion Paper Series In Economics And Econometrics with number 1008.

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Date of creation: 01 Apr 2010
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Handle: RePEc:stn:sotoec:1008

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  1. Ernst Fehr & Simon Gaechter, 2000. "Fairness and Retaliation: The Economics of Reciprocity," CESifo Working Paper Series 336, CESifo Group Munich.
  2. Goeree, Jacob K. & Holt, Charles A. & Laury, Susan K., 2002. "Private costs and public benefits: unraveling the effects of altruism and noisy behavior," Journal of Public Economics, Elsevier, vol. 83(2), pages 255-276, February.
  3. M. Rabin, 2001. "Incorporating Fairness into Game Theory and Economics," Levine's Working Paper Archive 511, David K. Levine.
  4. Andreoni, James & Payne, A. Abigail, 2011. "Is crowding out due entirely to fundraising? Evidence from a panel of charities," Journal of Public Economics, Elsevier, vol. 95(5), pages 334-343.
  5. Palfrey, Thomas R & Prisbrey, Jeffrey E, 1997. "Anomalous Behavior in Public Goods Experiments: How Much and Why?," American Economic Review, American Economic Association, vol. 87(5), pages 829-46, December.
  6. Becker, Gary S, 1974. "A Theory of Social Interactions," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1063-93, Nov.-Dec..
  7. Ellingsen, Tore & Johannesson, Magnus, 2011. "Conspicuous generosity," Journal of Public Economics, Elsevier, vol. 95(9), pages 1131-1143.
  8. Benabou, Roland & Tirole, Jean, 2005. "Incentives and Prosocial Behavior," IZA Discussion Papers 1695, Institute for the Study of Labor (IZA).
  9. Eckel, Catherine C. & Grossman, Philip J. & Johnston, Rachel M., 2005. "An experimental test of the crowding out hypothesis," Journal of Public Economics, Elsevier, vol. 89(8), pages 1543-1560, August.
  10. 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.
  11. Ellingsen, Tore & Johannesson, Magnus, 2006. "Pride and Prejudice: The Human Side of Incentive Theory," CEPR Discussion Papers 5768, C.E.P.R. Discussion Papers.
  12. James Andreoni, 2007. "Social Image and the 50-50 Norm: A Theoretical and Experimental Analysis of Audience Effects," Levine's Bibliography 122247000000001459, UCLA Department of Economics.
  13. Crumpler, Heidi & Grossman, Philip J., 2008. "An experimental test of warm glow giving," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 1011-1021, June.
  14. Robin Cubitt & Chris Starmer & Robert Sugden, 1998. "On the Validity of the Random Lottery Incentive System," Experimental Economics, Springer, vol. 1(2), pages 115-131, September.
  15. Tonin, Mirco & Vlassopoulos, Michael, 2012. "Experimental Evidence of Self-Image Concerns as Motivation for Giving," IZA Discussion Papers 6388, Institute for the Study of Labor (IZA).
  16. Tonin, Mirco & Vlassopoulos, Michael, 2010. "Disentangling the sources of pro-socially motivated effort: A field experiment," Journal of Public Economics, Elsevier, vol. 94(11-12), pages 1086-1092, December.
  17. 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.
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Cited by:
  1. Tonin, Mirco & Vlassopoulos, Michael, 2012. "Experimental Evidence of Self-Image Concerns as Motivation for Giving," IZA Discussion Papers 6388, Institute for the Study of Labor (IZA).
  2. David Reinstein, 2014. "The Economics of the Gift," Economics Discussion Papers 749, University of Essex, Department of Economics.
  3. Tonin, Mirco & Vlassopoulos, Michael, 2013. "Sharing One's Fortune? An Experimental Study on Earned Income and Giving," IZA Discussion Papers 7294, Institute for the Study of Labor (IZA).
  4. Kyriaki Remoundou & Andreas C. Drichoutis & Phoebe Koundouri, 2013. "Isolating Warm Glow in Charitable Auction Giving," Grantham Research Institute on Climate Change and the Environment Working Papers 131, Grantham Research Institute on Climate Change and the Environment.

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