IDEAS home Printed from https://ideas.repec.org/p/iuj/wpaper/ems_2009_08.html
   My bibliography  Save this paper

The Nature of Voluntary Public Good Contributions: When are They a Warm Glow or a Helping Hand?

Author

Abstract

"Warm glow" has been proposed as an explanation for public good contributions that exceed traditional theoretical predictions, yet little is known about why and when people exhibit warm glow in some voluntary settings. To investigate these issues, this research develops a model for the ``helping hand" hypothesis as an extension of warm glow. The hypothesis asserts that when an external environment faced by the subject seems not to provide a socially optimal level of the public good (non-incentive compatible), the subject, to some degree, gains utility by undertaking socially responsible behavior (offering a helping hand), and thus she over-contributes. Once the mechanism is established to be incentive compatible, the individual no longer offers a helping hand, but instead concentrates on maximizing her personal payoffs as predicted by the Nash equilibrium. Experimental results support the helping hand hypothesis, and show that contributions depend on the efficiency of the mechanism and not whether it is voluntary. We also find that contributions are positively correlated with an induced value of the public good even when free-riding is a dominant strategy in an non-incentive compatible mechanism. This would suggest that people's social preferences depend on an induced value of the public good and possess an efficiency concern.

Suggested Citation

  • Koji Kotani & Kent D. Messer & William D. Schulze, 2009. "The Nature of Voluntary Public Good Contributions: When are They a Warm Glow or a Helping Hand?," Working Papers EMS_2009_08, Research Institute, International University of Japan.
  • Handle: RePEc:iuj:wpaper:ems_2009_08
    as

    Download full text from publisher

    File URL: http://www.iuj.ac.jp/workingpapers/index.cfm?File=EMS_2009_08.pdf
    File Function: First version, 2009
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Deirdre N. McCloskey & Stephen T. Ziliak, 1996. "The Standard Error of Regressions," Journal of Economic Literature, American Economic Association, vol. 34(1), pages 97-114, March.
    2. Gary Charness & Matthew Rabin, 2002. "Understanding Social Preferences with Simple Tests," The Quarterly Journal of Economics, Oxford University Press, vol. 117(3), pages 817-869.
    3. Ferraro, Paul J. & Rondeau, Daniel & Poe, Gregory L., 2003. "Detecting other-regarding behavior with virtual players," Journal of Economic Behavior & Organization, Elsevier, vol. 51(1), pages 99-109, May.
    4. Rondeau, Daniel & Poe, Gregory L. & Schulze, William D., 2005. "VCM or PPM? A comparison of the performance of two voluntary public goods mechanisms," Journal of Public Economics, Elsevier, vol. 89(8), pages 1581-1592, August.
    5. Willinger, Marc & Ziegelmeyer, Anthony, 1999. "Framing and cooperation in public good games: an experiment with an interior solution," Economics Letters, Elsevier, vol. 65(3), pages 323-328, December.
    6. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
    7. Andreoni, James, 1995. "Cooperation in Public-Goods Experiments: Kindness or Confusion?," American Economic Review, American Economic Association, vol. 85(4), pages 891-904, September.
    8. Frey, Bruno S & Oberholzer-Gee, Felix, 1997. "The Cost of Price Incentives: An Empirical Analysis of Motivation Crowding-Out," American Economic Review, American Economic Association, vol. 87(4), pages 746-755, September.
    9. Glenn W. Harrison & John A. List, 2004. "Field Experiments," Journal of Economic Literature, American Economic Association, vol. 42(4), pages 1009-1055, December.
    10. Moshe Buchinsky, 1998. "Recent Advances in Quantile Regression Models: A Practical Guideline for Empirical Research," Journal of Human Resources, University of Wisconsin Press, vol. 33(1), pages 88-126.
    11. Brekke, Kjell Arne & Kverndokk, Snorre & Nyborg, Karine, 2003. "An economic model of moral motivation," Journal of Public Economics, Elsevier, vol. 87(9-10), pages 1967-1983, September.
    12. Kahneman, Daniel & Knetsch, Jack L., 1992. "Valuing public goods: The purchase of moral satisfaction," Journal of Environmental Economics and Management, Elsevier, vol. 22(1), pages 57-70, January.
    13. Keser, Claudia, 1996. "Voluntary contributions to a public good when partial contribution is a dominant strategy," Economics Letters, Elsevier, vol. 50(3), pages 359-366, March.
    14. Josef Falkinger, 2000. "A Simple Mechanism for the Efficient Provision of Public Goods: Experimental Evidence," American Economic Review, American Economic Association, vol. 90(1), pages 247-264, March.
    15. Messer, Kent D. & Poe, Gregory L. & Rondeau, Daniel & Schulze, William D. & Vossler, Christian A., 2006. "Exploring Voting Anomalies Using a Demand Revealing Random Price Voting Mechanism," Working Papers 127062, Cornell University, Department of Applied Economics and Management.
    16. 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 1447-1458, December.
    17. Attanasio, Orazio & Rios-Rull, Jose-Victor, 2000. "Consumption smoothing in island economies: Can public insurance reduce welfare?," European Economic Review, Elsevier, vol. 44(7), pages 1225-1258, June.
    18. 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 464-477, June.
    19. Catherine Eckel & Philip Grossman, 2008. "Subsidizing charitable contributions: a natural field experiment comparing matching and rebate subsidies," Experimental Economics, Springer;Economic Science Association, vol. 11(3), pages 234-252, September.
    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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kenta Tanaka & Keisaku Higashida & Arvin Vista & Anton Setyo Nugroho & Budi Muhamad Ruslan, 2016. "Do resource depletion experiences affect social cooperative preferences? Analysis using field experimental data on fishers in the Philippines and Indonesia," Discussion Paper Series 143, School of Economics, Kwansei Gakuin University, revised Jun 2016.
    2. Swallow, Stephen K., 2013. "Demand-side Value for Ecosystem Services and Implications for Innovative Markets: Experimental Perspectives on the Possibility of Private Markets for Public Goods," Agricultural and Resource Economics Review, Cambridge University Press, vol. 42(01), pages 33-56, April.
    3. Fooks, Jacob R. & Messer, Kent D., 2012. "Maximizing conservation and in-kind cost share: Applying Goal Programming to forest protection," Journal of Forest Economics, Elsevier, vol. 18(3), pages 207-217.
    4. Messer, Kent D. & Murphy, James J., 2010. "FOREWORD: Special Issue on Experimental Methods in Environmental, Natural Resource, and Agricultural Economics," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 39(2), April.
    5. repec:eee:jeeman:v:84:y:2017:i:c:p:209-222 is not listed on IDEAS

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iuj:wpaper:ems_2009_08. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kazumi Imai, Office of Academic Affairs). General contact details of provider: http://edirc.repec.org/data/gsiujjp.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.