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Impure Altruism in Dictators’ Giving

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  • Korenok Oleg

    ()
    (Department of Economics, VCU School of Business)

  • Edward L. Millner

    ()
    (Department of Economics, VCU School of Business)

  • Laura Razzolini

    ()
    (Department of Economics, VCU School of Business)

Abstract

We design an experiment to test whether the behavior of dictators can be rationalized by the impurely altruistic utility function. By giving the recipients an endowment of varying levels, we create an environment that allows for observable differences in behavior depending upon whether pure or impure altruism is the primary motivation. We find that the behavior of 66 percent of the dictators can be rationalized by the impurely altruistic utility function, while only 40 percent of the dictators make choices that are consistent with the purely altruistic utility function.

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Bibliographic Info

Paper provided by VCU School of Business, Department of Economics in its series Working Papers with number 1002.

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Length: 31 pages
Date of creation: Apr 2010
Date of revision: Jan 2011
Handle: RePEc:vcu:wpaper:1002

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Keywords: Dictator Game; Impure Altruism; Incomplete Crowding Out;

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References

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  1. 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.
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  3. Fehr, Ernst & Schmidt, Klaus M., . "A theory of fairness, competition, and cooperation," Chapters in Economics, University of Munich, Department of Economics.
  4. James C. Cox & Vjollca Sadiraj, . "Direct Tests of Models of Social Preferences and a New Model," Experimental Economics Center Working Paper Series 2006-13, Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University, revised Jul 2010.
  5. John A. List, 2007. "On the Interpretation of Giving in Dictator Games," Journal of Political Economy, University of Chicago Press, vol. 115, pages 482-493.
  6. Riber, D.C. & Wilhelm, M.O., 1996. "Altruistic and Joy-of-Giving Motivations in Charitable Behavior," Papers 1-96-4, Pennsylvania State - Department of Economics.
  7. Kingma, Bruce Robert, 1989. "An Accurate Measurement of the Crowd-Out Effect, Income Effect, and Price Effect for Charitable Contributions," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1197-1207, October.
  8. James Andreoni & A. Abigail Payne, 2010. "Is Crowding Out Due Entirely to Fundraising? Evidence from a Panel of Charities," Department of Economics Working Papers 2010-08, McMaster University.
  9. Hungerman, Daniel M., 2005. "Are church and state substitutes? Evidence from the 1996 welfare reform," Journal of Public Economics, Elsevier, vol. 89(11-12), pages 2245-2267, December.
  10. Jonathan Gruber & Daniel M. Hungerman, 2005. "Faith-Based Charity and Crowd Out during the Great Depression," NBER Working Papers 11332, National Bureau of Economic Research, Inc.
  11. Raymond Fisman & Shachar Kariv & Daniel Markovits, 2007. "Individual Preferences for Giving," American Economic Review, American Economic Association, vol. 97(5), pages 1858-1876, December.
  12. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March.
  13. Payne, A. Abigail, 1998. "Does the government crowd-out private donations? New evidence from a sample of non-profit firms," Journal of Public Economics, Elsevier, vol. 69(3), pages 323-345, September.
  14. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
  15. Khanna, Jyoti & Posnett, John & Sandler, Todd, 1995. "Charity donations in the UK: New evidence based on panel data," Journal of Public Economics, Elsevier, vol. 56(2), pages 257-272, February.
  16. 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.
  17. Bolton, G. & Katok, E., 1995. "An Experimental Test of the Crowding Out Hypothesis: The Nature of Beneficient Behavior," UFAE and IAE Working Papers 295.95, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  18. 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.
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  20. James Andreoni & John Miller, 2002. "Giving According to GARP: An Experimental Test of the Consistency of Preferences for Altruism," Econometrica, Econometric Society, vol. 70(2), pages 737-753, March.
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Citations

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Cited by:
  1. Yildirim, Huseyin, 2014. "Andreoni–McGuire algorithm and the limits of warm-glow giving," Journal of Public Economics, Elsevier, vol. 114(C), pages 101-107.
  2. Korenok Oleg & Edward L. Millner & Laura Razzolini, 2013. "Taking, Giving, and Impure Altruism in Dictator Games," Working Papers 1301, VCU School of Business, Department of Economics.
  3. Subhashish Modak Chowdhury & Joo Young Jeon, 2012. "Income effect and altruism," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 12-04, School of Economics, University of East Anglia, Norwich, UK..
  4. Ivo Bischoff & Thomas Krauskopf, 2013. "Motives of pro-social behavior in individual versus collective decisions – a comparative experimental study," MAGKS Papers on Economics 201319, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  5. Pelligra, Vittorio & Stanca, Luca, 2013. "To give or not to give? Equity, efficiency and altruistic behavior in an artefactual field experiment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 46(C), pages 1-9.

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