Experimental Economics and Game Theory Seminar for February 28

Events, Seminars | February 19, 2020

Join us for the ICES Seminar in Experimental Economics and Game Theory of the Spring 2020 semester, featuring Mariana Blanco.

Dr. Blanco, of Universidad del Rosario, will discuss her paper Generosity and Wealth: Experimental Evidence from Bogota Stratification (Abstract). The talk will take place on Friday, February 28th, from 4:00 to 5:00pm in room 5183 of Vernon Smith Hall, Arlington campus.
Visit the Seminar schedule to access the paper and to learn more about upcoming speakers.

Abstract

This paper combines laboratory experiments with a unique feature of the city of Bogot´a to uncover the relationship between generosity and wealth. Bogot´a is divided by law into six socio-economic strata which are close proxies of household wealth and income. We recruit subjects from different strata and run a series of double-blind dictator games where the recipient is the NGO Techo-Colombia, which builds transitional housing for homeless families. We identify the stratum of each subject anonymously and blindly, and match their donations with their stratum. In a first experiment we provide a fixed endowment to all participants and find that donations are significantly increasing with wealth. However, in a second experiment, we show that this is not because the rich are intrinsically more generous, but because the experimental endowment has lower real value for them. With endowments that are equivalent to their daily expenditures, the rich, the middle-class and the poor give a similar proportion of their stratum-equivalent endowment. Moreover, we find that the motivation to donate is similar across strata, where the generosity act is explained mainly by warm-glow rather than pure altruism.

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