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If the worst comes to the worst: Dictator giving when recipient’s endowments are risky

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  • Engel, Christoph
  • Goerg, Sebastian J.

Abstract

Donors may often not be sure whether a recipient really needs their help. Does this uncertainty deter generosity? We experimentally investigate a situation in which donors do not know the financial endowment of the recipient for certain, but still have some information on the distribution the endowments are drawn from. In the experiment, we find that uncertainty does not deter generosity. In fact, if we filter out selfish dictators, under most specifications of uncertainty dictators give more, compared with the donation dictators make to a recipient they know to have the expected value of the endowment with certainty. They are particularly concerned about the possibility of a recipient leaving the lab with no payoff from the game.

Suggested Citation

  • Engel, Christoph & Goerg, Sebastian J., 2018. "If the worst comes to the worst: Dictator giving when recipient’s endowments are risky," European Economic Review, Elsevier, vol. 105(C), pages 51-70.
  • Handle: RePEc:eee:eecrev:v:105:y:2018:i:c:p:51-70
    DOI: 10.1016/j.euroecorev.2018.03.011
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    Keywords

    Donation; Dictator game; Uncertainty;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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