A Neuroeconomic Perspective on Charitable Giving

Abstract:     
Psychologists and economists, particularly those assuming that people are rational egoists, have struggled to understand the causes of voluntary donation for decades. Why would a person decide to sacrifice part of his or her material payoff in order to increase the well being of others? In the first part of this paper, we outline a core set of possible motivations, and then consider how those motivations can be used to construct behavioral models that can also be tested in terms of what we know about brain function. We emphasize the role of other‐regarding preferences and argue that there are moral judgments, independent of any consideration of payoffs, that partially determine when and to whom such preferences exist. In the second part of the paper, we argue that a neuroeconomic perspective can help understand charitable giving, and then discuss recent neuroimaging studies that demonstrate this potential.

Number of Pages in PDF File: 14

Keywords: Moral psychology, Neuroeconomics, Charitable giving

working papers series