Models of Caring, or Acting as if One Cared, About the Welfare of Others

Julio Rotemberg

Annual Review of Economics, 2014, vol. 6, issue 1, 129-154

Abstract: This article surveys the theoretical literature in which people are modeled as taking other people’s payoffs into account either because this affects their utility directly or because they wish to impress others with their social-mindedness. Key experimental results that bear on the relevance of these theories are discussed as well. Five types of models are considered. In the first, an individual’s utility function is increasing in the payoffs of other people. The more standard version of these preferences supposes that only consumption leads to payoffs and has trouble explaining prosocial actions such as voting and charitable contributions by poor individuals. If one lets other variables determine happiness as well, this model can explain a much wider set of observations. The second type of model surveyed involves people trying to demonstrate to others that they have prosocial (or altruistic) preferences. In these models, altruistic acts need not have a direct effect on utility. The third class of models includes those of reciprocity in which people’s altruism depends on whether others act kindly or unkindly toward them. In the fourth type of model, inequality has a profound effect on altruism, with individuals being spiteful toward people whose resources exceed their own. Finally, I discuss the fifth type of model, in which specifications of altruism might have to be modified to take into account how people behave when they are able to transfer lotteries to others.

Keywords: altruism; reciprocity; social preferences; equal division (search for similar items in EconPapers)
JEL-codes: D03 D64 D72 (search for similar items in EconPapers)
Date: 2014
References: Add references at CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://www.annualreviews.org/doi/abs/10.1146/annurev-economics-072413-113000 (application/pdf)
Full text downloads are only available to subscribers. Visit the abstract page for more information.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:anr:reveco:v:6:y:2014:p:129-154

Ordering information: This journal article can be ordered from
http://www.annualreviews.org/action/ecommerce

Access Statistics for this article

More articles in Annual Review of Economics from Annual Reviews Annual Reviews 4139 El Camino Way Palo Alto, CA 94306, USA.
Bibliographic data for series maintained by http://www.annualreviews.org ().