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To Give or Not To Give? Equity, Efficiency and Altruistic Behavior in a Survey-Based Experiment

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  • Vittorio Pelligra
  • Luca Stanca

    ()

Abstract

This paper presents the results of a survey-based experiment on the role of equity and efficiency for altruistic behavior. Using simple binary decisions for a representative pool of subjects, we find that both equity and efficiency are relevant for the decision to give. However, contrary to the findings in several laboratory experiments, our results indicate that equity plays a major role for altruistic behavior. Differences in relative payoffs have a significant effect on the decision to give. When giving is not costly, more than half of the subjects prefer equal payoffs to a socially efficient but unequal allocation. When giving is Pareto-improving, half the subjects choose to sacrifice a higher payoff in order to avoid payoff inequality. We also find that preferences, as revealed by experimental choices, are largely consistent with reported pro-social activities, while only weakly related to self-reported well-being.

Suggested Citation

  • Vittorio Pelligra & Luca Stanca, 2010. "To Give or Not To Give? Equity, Efficiency and Altruistic Behavior in a Survey-Based Experiment," Working Papers 202, University of Milano-Bicocca, Department of Economics, revised Dec 2010.
  • Handle: RePEc:mib:wpaper:202
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    References listed on IDEAS

    as
    1. Charness, Gary & Grosskopf, Brit, 2001. "Relative payoffs and happiness: an experimental study," Journal of Economic Behavior & Organization, Elsevier, vol. 45(3), pages 301-328, July.
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    Keywords

    Altruism; Inequality-Aversion; SocialWelfare; Envy; Large-Scale Experiment;

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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