Relative Earnings and Giving in a Real-Effort Experiment

Nisvan Erkal, Lata Gangadharan () and Nikos Nikiforakis ()

No 1067, Department of Economics - Working Papers Series from The University of Melbourne

Abstract: This paper investigates the relationship between relative earnings and giving in a twostage, real-effort experiment. In the first stage, four players compete in a tournament that determines their earnings. In the second stage, they decide whether they wish to transfer part of their earnings to one or more of their group members. Our main finding is that those who are ranked first are significantly less likely to give than those who are ranked second. This non-monotonic relationship between earnings and likelihood of giving disappears if individual earnings are randomly determined or if individuals learn about the second (transfer) stage only after they earn their income. These results suggest that the non-monotonic relationship detected may be driven by differences in individuals’ expectations about others’ behavior in the second stage, which are correlated with their own willingness to give.

Keywords: Relative income; Altruism; Real effort; Self-selection; Luck (search for similar items in EconPapers)
JEL-codes: C91 D3 D64 I3 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2009
New Economics Papers: this item is included in nep-cbe and nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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Related works:
Journal Article: Relative Earnings and Giving in a Real-Effort Experiment (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:mlb:wpaper:1067

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