Table of Contents

Beyond Homo Economicus: The Prosocial Brain & The Charitable Tax Deduction

Ryan S. Keller, University of Cambridge, Yale University - Law School


NEUROECONOMICS eJOURNAL

"Beyond Homo Economicus: The Prosocial Brain & The Charitable Tax Deduction" Free Download
Virginia Tax Review (Forthcoming)

RYAN S. KELLER, University of Cambridge, Yale University - Law School
Email:

Charitable tax policy is at an impasse. Historically, citizens have overwhelmingly supported the charitable tax deduction as a means of fostering diversity, encouraging donations and supporting the nonprofit sector. Yet various policymakers and academics have increasingly disputed the deduction’s cogency and justifiability. In response, legal scholars and economists have offered various defenses and assessments of the deduction, but these have not convinced skeptics or placed the deduction on sufficiently solid theoretical and policy footing. The article adopts a novel approach by instead employing recent research in the neuroscience and psychology of prosocial behavior and charitable giving. Specifically, it identifies structural advantages specific to the deduction, rather than to charity or nonprofits more broadly. It then delineates key neural mechanisms and psychological functions that provide evidence linking dimensions of the deduction to distinct, previously neglected positive externalities. Amidst growing skepticism, developing a more capacious understanding of the deduction’s worth to society is essential. Indeed, failure to consider more robust, innovative analyses of the deduction compels authorities to craft policy without adequate information, and leaves the deduction and thus many philanthropic endeavors needlessly vulnerable.

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About this eJournal

This eJournal distributes working and accepted paper abstracts focused on research where economic outcomes are the product of many individual decisions, constrained by scarcity, and equilibrium forces that simultaneously shape a person's social networks and the institutionally defined rules of the game. Decisions are made by computations in the brain which produce action-choices that directly affect the homeostatic wellbeing of the individual and choices that indirectly change wellbeing by changing an individual's future constraints, the scope of their social networks, and their message sending rights within the institutions they participate. Neuroeconomics broadly speaking is interested in the study of these computations and the resulting choices they produce. This includes experiments that attempt to understand the mechanisms of neuronal computations that produce action-choices, theories which predict how neuronal computations in socio-economic environments produce decisions, outcomes and wellbeing, and policy which use our understanding of neuoroeconomic behavior to either build or defend better solutions to societal problems.

Editors: Michael C. Jensen, Harvard University, and Kevin A. McCabe, George Mason University

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ERN SUBJECT MATTER EJOURNALS

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Social Science Electronic Publishing (SSEP), Inc., Harvard Business School, National Bureau of Economic Research (NBER), European Corporate Governance Institute (ECGI)
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Neuroeconomics eJournal

ANDREW W. LO
Harris & Harris Group Professor, Massachusetts Institute of Technology (MIT) - Sloan School of Management, Principal Investigator, Massachusetts Institute of Technology (MIT) - Computer Science and Artificial Intelligence Laboratory (CSAIL), National Bureau of Economic Research (NBER)

P. READ MONTAGUE
Professor, Baylor University - Department of Neuroscience

VERNON L. SMITH
Professor of Economics and Law, Chapman University - Economic Science Institute, Chapman University School of Law