Experimental Economics and Game Theory Seminar for February 7

Events, Seminars | February 3, 2020

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

Dr. Lange, of Hamburg University, will discuss his paper Prosociality Across Domains: True Preferences and Strategic Behavior (Abstract). The talk will take place on Friday, February 7th, 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

Prosociality can take many forms. While many experiments on charitable giving have investigated drivers for donation decisions, many lab experiments consider direct giving to other persons in order to gain insights into the nature of social preferences.

In this paper, we report experimental findings that contribute to a better understanding of motivations giving across both of these domains. Our experimental design builds on variants of dictator and ultimatum games that vary the channels through which prosociality can be demonstrated. We show how a combination of inequality aversion and warm-glow from giving can best explain the results. Responders seem not to cater to their warm-glow sensation when accepting a prosocial offer, even though they are interested in the cause. In our treatments, we also vary the enforceability of the donation pledge, the competitive pressure, as well as the options for additional voluntary donations to identify strategic motivations for prosocial behavior. We find substantial deviations from the initial donation pledges by proposers, indicating that (a subset of) proposers uses the bundle as a strategic device to generate acceptance. We formulate conclusions for the desirability on information provision on actual donation decisions.

While primarily gaining insights into individual prosocial motivations, our experiment is inspired by bundling of private and public goods in the marketplace, i.e. when firms link their products and services with contributions to public goods or charities. Here, the firm’s offer to the costumer can be interpreted as a take-it-or-leave-it offer that distributes the surplus between firm, costumer, and a charity. Our experiment sheds some light on how such activities affect the total voluntary provision of public goods by investigating to what extent they crowd out otherwise occurring voluntary donations to the respective cause.

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