Altruism, Equity, and Reciprocity in a Gift Exchange Experiment: An Encompassing Approach

Universitat Pompeu Fabra, Department of Economics Working Paper No. 368

42 Pages Posted: 5 Aug 1999

See all articles by Gary Charness

Gary Charness

University of California, Santa Barbara (UCSB) - Department of Economics

Ernan Haruvy

University of Texas at Dallas - Naveen Jindal School of Management

Date Written: March 1999

Abstract

Considerable experimental evidence suggests that non-pecuniary motives must be addressed when modeling behavior in economic contexts. Recent models of non-pecuniary motives can be classified as either altruism- based, equity-based, or reciprocity-based. We estimate and compare leading approaches in these categories, using experimental data. We then offer a flexible approach that nests the above three approaches, thereby allowing for nested hypothesis testing and for determining the relative strength of each of the competing theories. In addition, the encompassing approach provides a functional form for utility in different settings without the restrictive nature of the approaches nested within it. Using this flexible form for nested tests, we find that intentional reciprocity, distributive concerns, and altruistic considerations all play a significant role in players' decisions.

JEL Classification: A13, C50, C70, C91, D21, J30

Suggested Citation

Charness, Gary and Haruvy, Ernan, Altruism, Equity, and Reciprocity in a Gift Exchange Experiment: An Encompassing Approach (March 1999). Universitat Pompeu Fabra, Department of Economics Working Paper No. 368. Available at SSRN: https://ssrn.com/abstract=163236 or http://dx.doi.org/10.2139/ssrn.163236

Gary Charness (Contact Author)

University of California, Santa Barbara (UCSB) - Department of Economics ( email )

2127 North Hall
Santa Barbara, CA 93106
United States
805-893-2412 (Phone)
805-893-8830 (Fax)

Ernan Haruvy

University of Texas at Dallas - Naveen Jindal School of Management ( email )

P.O. Box 830688
Richardson, TX 75083-0688
United States

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