WARM‐GLOW GIVING: EARNED MONEY AND THE OPTION TO TAKE

Giving in dictator games has been shown to vary with the nature of the endowment (earned vs. house money) and the action space (give only vs. the option to give or take). This article is the first to test if these factors similarly affect warm‐glow giving alone. There is no reason that one would expect the same outcomes given that the motivations for warm‐glow giving are different from the motivations for total (warm‐glow plus purely altruistic) giving. We find that warm‐glow giving to charity or philanthropic institutions in a real‐donation experiment increases when the endowment is earned. The option to take does reduce warm‐glow giving to charity, but significant giving remains. Our results suggest that donating earned income creates greater utility than donating an equal amount from a windfall gain, and that warm glow comes not merely from the act of giving, but also from the characteristics of the recipient. (JEL C90, D64, H41)     

Ex-post blindness as excuse? The effect of information disclosure on giving

People passing by beggars without leaving a penny are not necessarily pure money-maximizers. In the world of sincere and dishonest recipients, some donors might anticipate the disutility they will suffer at the moment they realize their help is misdirected and reduce their willingness to donate to avoid these psychological costs. I employ a dictator game with ex-ante uncertainty about recipient’s endowment and requests from recipients to study how donors react to ex-post revelation of recipient’s type. I observe no difference in donations with and without ex-post information about recipient’s endowment. However, if donors could choose if they want to receive such information themselves, nearly a third of dictators choose to remain ignorant. Those dictators who choose to ex-post reveal the endowment of the recipient give significantly more.     

ENDOWMENTS,PERCEIVED SIMILARITY,AND DICTATOR GIVING

A common assumption of money is that it is fungible. An implication of this assumption is that the source of money does not affect economic decision making. We find evidence contradicting this fungibility assumption. Specifically, we explore how the perception of an endowment source influences amounts sent in a dictator game. We find perceived similarity to the endowment provider to be negatively correlated with dictator offers. Dictators who consider themselves relatively more similar to their endowment provider send significantly smaller amounts to their partners. Our results demonstrate that economic decision making can be influenced by the provider of income shocks. (JEL C78, C91, C99, D31, D64, D74)     

THE POLITICAL ECONOMICS OF THE ARAB SPRING

There were large differences in the responses of Arab dictators to the Arab Spring protests. To understand these differences, I present a stylized model of how a dictator responds to mass protests for democratization in a polarized country with two ethnic or religious groups. In this model, the dictator's response crucially depends on oil revenues and his affiliation to either the majority or the minority group. I document that the model's predictions are consistent with the observed differences in the Arab dictators' responses. Hence, ethnic politics and religious divides may play an important role in political transitions and regime changes. (JEL D72, D74)     

Does generosity generate generosity? An experimental study of reputation effects in a dictator game

Previous experimental literature on reputation studies its effects in environments where they are often confounded with strategic behavior. This paper explores how information about the paired subject’s previous action affects one’s own behavior in a non-strategic environment of a dictator game. The experiment consists of two treatments in which dictators can give money to the paired player: one where the recipient is a stranger and the other where the dictator has information on the recipient’s reputation. The data provide evidence that on average the dictators send more money to recipients with a reputation for being generous than to recipients with no reputation. The results contribute to our understanding of how impulses towards generous (or selfish) behavior might arise.     

Criteria for Assessing the Case for Overseas Aid: A Note

This note derives minimum appraisal criteria for foreign aid consistent with those used by donor governments for domestic spending, and discusses implications for the level, allocation and financing of aid programmes. One finding is that aid is only welfare‐enhancing when the recipient country's social time preference rate is higher than the donor's, as will normally be the case. This implies that endowment financing is inferior to funding aid from current income, though borrowing against future aid as proposed by the International Financing Facility can be worthwhile provided returns exceed the borrowing cost.     

Eliciting Donor Preferences

Most charity organizations depend on contributions from the general public, but little research is conducted on donor preferences. Do donors have geographical, recipient, or thematic preferences? We designed a conjoint analysis experiment in which people rated development aid projects by donating money in dictator games. We find that our sample show strong age, gender, regional, and thematic preferences. Furthermore, we find significant differences between segments. The differences in donations are consistent with differences in donors’ attitudes toward development aid and their beliefs about differences in poverty and vulnerability of the recipients. The method here used for development projects can easily be adapted to elicit preferences for other kinds of projects that rely on gifts from private donors.     

WORKING TO EXIT POVERTY WHILE CARING FOR CHILDREN'S HEALTH AND DEVELOPMENT IN VIETNAM

Since the implementation of economic reforms in 1986, levels of urbanization, industrialization, and women's labour force participation have increased in Vietnam. This article focuses on the experiences of parents in Vietnam and how labour and social conditions affect their ability to work and exit poverty while caring for their children's health and development. We interviewed a sample of 147 parents in Ho Chi Minh City using in-depth, semi-structured questionnaires. Sixty-three percent of parents had faced loss of income or promotions or had difficulty retaining jobs because they had to care for children. Fifty-eight percent of parents lost income while caring for their sick children because they had to take unpaid leave from work to care for their children or because they had to decrease productivity if they were able to continue working. Fifty percent of parents with school-age children experienced barriers to helping with homework, to attending meetings, or to participating in other aspects of their children's education. The aftermath of the Vietnamese – American War affected parents through loss of extended family members, limiting access to a major traditional source of support. The war had affected other parents by preventing them from completing their education, which left them with job choices that offer little or no work benefits. Although Vietnam has made significant progress in providing early childhood care and education and legislating labour laws, working families’ experiences demonstrate the need to ensure that paid leave and work flexibility policies are available and implemented in all work sectors and to expand affordable, quality child care in order to help low-income working parents in Vietnam meet work demands and exit poverty while meeting their children's needs.     

The importance of moral reflection and self-reported data in a dictator game with production

This article studies how individual behavior is affected by moral reflection in a dictator game with production. We make individuals reflect on fairness, in a structured way, before they play the dictator game. Our results suggest that moral reflection not only increases the weight people attach to fairness in distributive choices, but also has a strong effect on what people consider fair. Furthermore, we study the informational value of self-reported data. We find that self-reported data have substantial informational value, but do not add explanatory power to a random utility model estimated on purely behavioral data. Finally, we study whether there is a self-serving bias in the participants’ fairness perceptions, but do not find much evidence of this phenomenon in the data.     

Knowing what I should, doing what I want: From selfishness to inequity aversion in young children’s sharing behavior

The social utility model suggests that people feel more satisfied with equal divisions of resources than from inequitable outcomes, even when the latter favors oneself. Research examining children’s behavior has shown that the tendency to share half of one’s endowment increases with age between the ages of 3 and 8. However, the satisfaction the children derive from their decisions (to share half of their endowments) has yet to be examined. I present two studies (using the dictator and ultimatum games) suggesting that young children (5-6 years old) are aware of the norms of fairness but choose to act selfishly and prefer not to share. Slightly older children aged 7-8 adopt these norms in their actual behavior but do not feel happier when they share half of their endowments than when they share less than half. Finally, true inequity aversion only appears at the ages of 9-10, when children not only give more, but they correspondingly also feel better when their endowments are equally divided.     

Fathers' employment in a father-friendly welfare state: does fatherhood affect men's working hours?

An important aim of Norwegian work–family policies is to enhance the family role of fathers. Time-use surveys show a slight increase in fathers’ family work, but we still know little about the relationship between men's family circumstances and working hours. On the one hand, policy measures encourage the greater involvement of fathers in family life. On the other hand, men are the main providers in most couples and employment and breadwinning are still important components of men's fathering identity. In this paper, we examine the relationship between fatherhood and working time, with a particular focus on the possible effects of the number and ages of children. Utilizing the Norwegian Labour Force Survey 2005, we find that men's contractual working hours are not significantly affected by their parental status, but men do curtail their actual working hours when they have young children, and particularly if there is only one child in the household. However, men with school-aged children actually work longer hours than non-fathers and men with young children.     

Risky choice in interpersonal context: Do people dare because they care?

This paper presents an experimental study investigating the interplay of individuals’ other-regarding preferences and individuals’ risk attitude. Participants (N = 120) had to make choices between a certain and risky payoff only for themselves (individual context) and choices in which the participants were paired with another randomly assigned participant who functioned as a passive recipient (interpersonal context). In the interpersonal context the risky option was beneficial for the other person while the certain option was not. Thus, the interpersonal choice context was an abstract representation of the incentive structure in helping situations, which yield risk only for the helper. Risky options in the interpersonal context yielded different payoff distributions, which allowed us to identify how considerations of fairness affect interpersonal risky choices. To assess other-regarding preferences, a dictator game was played. First we found that participants were generally less risk averse in the interpersonal choices; however, the degree of risk aversion was affected by the distribution of payoffs between decider and recipient. Furthermore, we found that changes of risk aversion in an interpersonal context could be predicted with the proposed splits in the dictator game.     

The Influence of Information Costs on Donor Decision Making

This article explores whether an individual's information costs influence the information‐gathering strategies that he or she turns to prior to donating to a nonprofit. The data for the study come from a telephone survey of residents in a large county in southern California (n = 1,002). The sample was selected using random‐digit‐dialing technology and a computer‐assisted telephone interviewing system. A series of binomial logit models revealed that information costs significantly influenced the information‐gathering strategies individuals turned to in order to learn about nonprofit performance prior to making a donation. Results also revealed that greater confidence in nonprofits did not lead individuals to forgo efforts to obtain information on nonprofit performance altogether. The findings from this study suggest that it is important for nonprofit administrators to recognize, and then take into account, that not all individuals will rely on the same information sources when seeking to learn about nonprofit performance.     

The gender gap in teenagers’ incomes. A 30-year trend in Finland 1983–2013

In this article, we examine the gender differences in disposable incomes of teenagers during a 30-year period 1983–2013, using large nationally representative survey data. Since the gender pay gap in working life has been rather persistent in Finland and the EU, it was necessary to see whether the gap persists in teenagers’ incomes as well. Although teenagers do not receive much income from work, they adapt to the structures of society during their teenage years and learn gender roles in consumption, education, and working life. Our results reveal that the gender pay gap has been rather persistent in Finland, particularly among 14- and 16-year-old teenagers. It is only among 18-year-olds that the gender difference in income has narrowed. There were interactions between gender and socio-economic indicators such as the father's education and family's place of residence. The persistent gender pay gap cannot be explained solely by wage differences in any age group, because full-time work of teenagers is nowadays very rare, and in Finland they do not work very much even part-time. Although it is rather obvious that boys get higher incomes than girls from external work, the allocation of money by parents seems to be unequal, too.     

Three phase development of caring capacity in primary caregivers for relatives with Alzheimer's disease

Multiple, open-ended, qualitative interviews were conducted with 16 primary caregivers for relatives with Alzheimer's disease in order to describe caregiver self-development through the caregiving journey. Caregiver change is traced up to five years after the care recipient's death. Caregivers' capacity for caring was found to be at the core and to unfold in three phases: development of caring capacity for the care recipient, development of capacity for self-care, and development of caring capacity for others. The four elements of caring capacity (perception, motivation, competency, action) are expressed in relation to the care recipient, to the self, and to less familiar “others”. The caregiving experience tends also to prompt caregivers to become caregivers for humanity and to expand their sense of self. This may lead to the development of the altruistic self, which incorporates both a selfless concern for the welfare of others and a self-directed concern for one's own welfare.     

Fairness as a constraint on reciprocity: Playing simultaneously as dictator and trustee

The dictator and trust games are two common games used to identify the existence of social preferences. However, in many social interactions, individuals face the environments in both games simultaneously: for example we are often engaged in charitable donations to strangers, as well as reciprocal exchange with family members and colleagues. As giving in one game could be prioritised over giving in the other, it is important to have participants play both as a dictator in the dictator game and as a trustee in a trust game simultaneously. The results indicate that when the recipient in the dictator game is significantly poorer relative to the dictator, the dictator tends to return an amount to the trustor such that the trustor neither makes a loss nor profit from trusting. This suggests that the presence of a sufficiently strong incentive to make transfers as a dictator may completely crowd-out any monetary returns to trust.     

Accountability and the fairness bias: the effects of effort vs. luck

According to the principle of accountability a person’s fair allocation takes into account the input-relevant variables she can influence, like effort, but not the variables she cannot influence, like luck. We study redistribution behavior in a real effort-task experiment, where luck influences production in three versions that differ in their effort-relatedness: luck comes either as wage luck, endowment luck or payment luck. We confirm that in a base treatment, i.e., in absence of luck, subjects base their allocation decisions largely on effort. When luck is present behavior changes. While we find that redistribution behavior of high performers in the real effort-task is affected by wage luck, we find that endowment luck affects mostly redistribution behavior of low performers. Furthermore, when introducing payment luck, i.e., redistribution of certain versus probabilistic payments, we find that allocations are more selfish for probabilistic payments.     

Testing models of information avoidance with binary choice dictator games

Standard social choice experiments generally force subjects to make decisions about giving money to another person, but the ability to avoid information outside of the lab could lead to less altruistic or fair behavior than such experiments tend to suggest. I expand on the design of Dana, Weber, and Kuang (2007) to better study information avoidance in an experimental setting. Subjects are given the chance to avoid information about a recipient’s payoffs in a dictator game. I vary the probability that a dictator’s payoffs will be aligned with the recipient’s in order to assess the role of beliefs on avoidance and test contradictory models. The within-subjects approach shows that even people who are generous in a stark choice will make self-serving decisions when they can avoid knowing the recipient’s outcome. People avoid information more often when the self-serving choice is unlikely to hurt the recipient, which supports Rabin’s model (1995) of moral rules and moral preferences.     

Working couples and class identification

This study examines the class identification patterns of married persons with working spouses. The analysis replicates earlier research demonstrating that the subjective class position of working wives is not determined solely by the husband's occupation but is also influenced by their own position in the labor force. In addition, it is argued that the class identification of men is affected by the wife's work experience. The class positions of individuals within families appears to be affected by both an individual's own occupation as well as that of the spouse.     

Motivational crowding out effects in charitable giving: Experimental evidence

This paper tests motivational crowding out in the domain of charitable giving. A novelty is that our experiment isolates alternative explanations for the decline of giving, such as strategic considerations of decision-makers. Moreover, preference elicitation allows us to focus on the reaction of donors characterized by different degrees of intrinsic motivation. In the charitable-giving setting subjects donate money to the German “Red Cross” in two consecutive donations. The first dictator game is modified, i.e., donors face with equal probability an ex post reimbursement or a subsequent payment. The second game is a standard dictator game. We find that after an ex post change in the price of giving of the first donation, substantially more donors with a high degree of intrinsic motivation decrease donations than subjects with a low degree of intrinsic motivation and donors who did not experience a price effect. In a replication study we find support for these results for subjects who have previously participated in at least one economic experiment.