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Charitable Giving as a Signal of Trustworthiness: Disentangling the Signaling Benefits of Altruistic Acts

Author

Listed:
  • Fehrler, Sebastian

    () (University of Konstanz)

  • Przepiorka, Wojtek

    () (Utrecht University)

Abstract

It has been shown that psychological predispositions to benefit others can motivate human cooperation and the evolution of such social preferences can be explained with kin or multi-level selection models. It has also been shown that cooperation can evolve as a costly signal of an unobservable quality that makes a person more attractive with regard to other types of social interactions. Here we show that if a proportion of individuals with social preferences is maintained in the population through kin or multi-level selection, cooperative acts that are truly altruistic can be a costly signal of social preferences and make altruistic individuals more trustworthy interaction partners in social exchange. In a computerized laboratory experiment, we test whether altruistic behavior in the form of charitable giving is indeed correlated with trustworthiness and whether a charitable donation increases the observing agents' trust in the donor. Our results support these hypotheses and show that, apart from trust, responses to altruistic acts can have a rewarding or outcome-equalizing purpose. Our findings corroborate that the signaling benefits of altruistic acts that accrue in social exchange can ease the conditions for the evolution of social preferences.

Suggested Citation

  • Fehrler, Sebastian & Przepiorka, Wojtek, 2013. "Charitable Giving as a Signal of Trustworthiness: Disentangling the Signaling Benefits of Altruistic Acts," IZA Discussion Papers 7148, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp7148
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Matteo M. Galizzi & Daniel Navarro Martinez, 2015. "On the external validity of social-preference games: A systematic lab-field study," Economics Working Papers 1462, Department of Economics and Business, Universitat Pompeu Fabra.
    2. repec:eee:enepol:v:107:y:2017:i:c:p:43-52 is not listed on IDEAS
    3. Galizzi, Matteo M. & Navarro-Martínez, Daniel, 2018. "On the external validity of social preference games: a systematic lab-field study," LSE Research Online Documents on Economics 84088, London School of Economics and Political Science, LSE Library.
    4. Gambetta, Diego & Székely, Áron, 2014. "Signs and (counter)signals of trustworthiness," Journal of Economic Behavior & Organization, Elsevier, vol. 106(C), pages 281-297.
    5. Fehrler, Sebastian & Przepiorka, Wojtek, 2016. "Choosing a partner for social exchange: Charitable giving as a signal of trustworthiness," Journal of Economic Behavior & Organization, Elsevier, vol. 129(C), pages 157-171.
    6. repec:eee:jbrese:v:84:y:2018:i:c:p:82-88 is not listed on IDEAS
    7. Eric Schniter & Roman M. Sheremeta & Daniel Sznycer, 2011. "Restoring Damaged Trust with Promises, Atonement and Apology," Working Papers 11-18, Chapman University, Economic Science Institute.
    8. David Ong & Chun-Lei Yang, 2014. "Pro Bono Work and Trust in Expert Fields," CESifo Working Paper Series 4897, CESifo Group Munich.

    More about this item

    Keywords

    trust; social preferences; costly signaling; evolution of cooperation; altruism; trustworthiness;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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