Deterministic vs. Stochastic Altruism

39 Pages Posted: 7 Dec 2022

See all articles by Arianna Galliera

Arianna Galliera

University of Parma

Giovanni Ponti

Universidad de Alicante - Department of Economic Analysis; Luiss Guido Carli University - Department of Economics and Finance

Date Written: November 28, 2022

Abstract

We report experimental evidence from a 3-person Dictator Game in which dictators decide over the distribution of probabilities of winning a fixed, indivisible, monetary prize. This evidence is compared with (i) a control treatment in which money is perfectly divisible and dictators allocate shares of the prize across the group members, and with (ii) a novel "hybrid" protocol by which a fraction of the prize is allocated deterministically, and the remainder by way of a lottery. Dictators' decisions are framed within a (suitably modified version of) Saito (2013)'s model of distributional justice, also controlling for (own payoff) risk aversion. This allows us to disentangle -both structurally and experimentally- motives for equality of opportunity from motives for equality of outcomes. Our structural estimates suggest that the former have a greater impact on subjects' distributional choices (favoring altruism in the stochastic frame), while subjects' revealed risk aversion lowers the opportunity cost of giving (favoring altruism in the deterministic frame). In our data, those conflicting effects cancel each other, yielding a non significant difference in giving between the stochastic and deterministic treatment.

Keywords: Dictator games, social preferences, risk preferences

JEL Classification: C91, D81

Suggested Citation

Galliera, Arianna and Ponti, Giovanni, Deterministic vs. Stochastic Altruism (November 28, 2022). Available at SSRN: https://ssrn.com/abstract=4287452 or http://dx.doi.org/10.2139/ssrn.4287452

Arianna Galliera (Contact Author)

University of Parma

via Università 12
Parma, 43100
Italy

Giovanni Ponti

Universidad de Alicante - Department of Economic Analysis ( email )

03080 Alicante
Spain

Luiss Guido Carli University - Department of Economics and Finance ( email )

Viale di Villa Massimo, 57
Rome, 00161
Italy

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