Individual Preferences for Giving

Abstract

Economic thought has in recent years increasingly departed from the paradigm of narrow self-interestedness to take up other-regarding preferences. We study one class of such preferences - individual preferences for giving.

We use graphical representations of modified Dictator Games that vary the price of giving. This generates a very rich data set well suited to studying behavior at the level of the individual subject. We test the data for consistency with preference maximization, and we recover underlying preferences and forecast behavior using both nonparametric and parametric methods.

We report two principal results. First, individual preferences for giving, at least in dictator games, are well behaved in the economic sense (and not formally any less rational than preferences over various forms of own-consumption). Second, people's preferences for giving are heterogenous and much more shaded than the standard dictator game literature reports. Fewer people are display the pure or idealized preferences associated with Rawlsian or utilitarian moral theories and more have intermediate or hybrid preferences. Where standard experiments force subjects to make extreme choices and produce results that favor attributions of idealized preferences, our experiment gives subjects a broader range of alternatives and produces data that allows for more subtle extrapolations.

Keywords: experimental economics, rationality, altruism

JEL Classification: C71, C91, D64