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On the nature of pessimism in taking and giving games

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  • Smith, Alexander

Abstract

I study allocations and beliefs about allocations in taking and giving games. The allocations are not significantly different between the two games, providing evidence on the isomorphism (equivalence) of taking and giving. In both games, the passive players are pessimistic about (underestimate) their allocations. However, the nature of the pessimism varies. In the taking game, takees underestimate the average allocation of takees and expect that their allocations will be lower than the average. In the giving game, recipients underestimate the average amount received, but do not expect allocations different from the average. The results therefore indicate that framing (taking versus giving) affects the reasons for which beliefs are biased. Third parties also underestimate the average allocations of takees and recipients, suggesting that takees’ and recipients’ biased expectations about average allocations are not attributable to having monetary stakes in the game. I also find that the effect of the decision-maker's gender on allocations varies by game, takees’ beliefs are related to trust, and recipients’ beliefs relate to knowing more people.

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  • Smith, Alexander, 2015. "On the nature of pessimism in taking and giving games," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 54(C), pages 50-57.
    • Handle: RePEc:eee:soceco:v:54:y:2015:i:c:p:50-57
    DOI: 10.1016/j.socec.2014.10.005
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    4. Grossman, Philip J. & Eckel, Catherine C., 2015. "Giving versus taking for a cause," Economics Letters, Elsevier, vol. 132(C), pages 28-30.
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    7. Claudia Keser & Maximilian Späth, 2021. "Charitable Giving: Framing and the Role of Information," CIRANO Working Papers 2021s-23, CIRANO.
    8. Keser, Claudia & Späth, Maximilian, 2021. "Charitable giving: Framing and the role of information," University of Göttingen Working Papers in Economics 424, University of Goettingen, Department of Economics.

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    Keywords

    Taking; Giving; Beliefs; Pessimism; Gender;
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