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Impure altruism or inequality aversion ? : An experimental investigation based on income effects ☆
| Content Provider | Semantic Scholar |
|---|---|
| Author | Chowdhury, Subhasish M. Jeon, Joo Young |
| Copyright Year | 2016 |
| Abstract | a r t i c l e i n f o JEL classification: C91 D03 D64 Keywords: Altruism Dictator-game Income effect Impure altruism Inequality aversion We investigate the consequences of a pure income effect on the altruistic behavior of donors. Inequality aversion theories predict either no effect or a decrease in giving, whereas impure altruism theory predicts an increase in giving with an increase in the common income of donor and receiver. Theoretical predictions being contradictory, we run a dictator game in which we vary the common show-up fee of both the dictator and the recipient, while keeping an extra amount to be shared the same. The results are in line with the prediction of the impure altruism theory. The literature on social preferences, since its inception, has displayed a significant interest in understanding altruism — defined as the principle or practice of concern for the welfare of others. Both theoretical and experimental studies continue to analyze and explain the possible components that affect altruistic decisions. It is intuitive that along with other factors, one's altruistic behavior can be influenced by income effects. Except for a few recent developments, the existing literature, however, has abstracted away from this issue. Specifically, how altruistic behavior is affected by a change in income — that has no effect on inequality — has never been investigated. In this paper we aim to fill this gap. We modify relevant existing theoretical models and run a simple dictator game to answer this question. It turns out that in cases where inequality is not salient, income effects are explained with impure altruism. In a standard dictator game a subject (the dictator) decides how much money to allocate between himself and another passive subject (the recipient). Both the dictator and the recipient are given a show-up fee, and the dictator is then asked to divide an extra amount between himself and the recipient. It is observed that a substantial proportion of dictators allocate a non-trivial share (Kahneman et al. Since its introduction in the present form, this game has often been used to understand altruism, as the dictator does not otherwise have any incentive to share the money with the recipient. explain this seemingly non-rational behavior of dictators. Whereas pure altruism assumes that the donor gets utility purely from the well-being of the receivers, inequality aversion theories hypothesize that donors incur disutility from inequality and that, in turn, … |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | http://isiarticles.com/bundles/Article/pre/pdf/47913.pdf |
| Language | English |
| Access Restriction | Open |
| Subject Keyword | Quantity REM Sleep Behavior Disorder Risk aversion Sexual Aversion Disorder Social inequality Theory Utility Whole Earth 'Lectronic Link |
| Content Type | Text |
| Resource Type | Article |
