The impact of background risk on altruistic giving

Mickael Beaud, Yujiang Sun () and Marc Willinger ()
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Yujiang Sun: CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier
Marc Willinger: CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier

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Abstract: This paper investigates the effect of an additive unfair background risk on the optimal donation behavior of a purely altruistic decision-maker in the dictator game. Assuming both the dictator and the recipient face this background risk, and that the dictator is risk-vulnerable, we find that the presence of background risk reduces the deviation of the optimal donation from an equal split. This outcome holds whether the dictator's fairness is evaluated ex-ante or ex-post, offering new insights into the implications of risk vulnerability.

Keywords: Pure altruism; background risk; Risk vulnerability (search for similar items in EconPapers)
Date: 2025-02-04
Note: View the original document on HAL open archive server: https://hal.inrae.fr/hal-04929525v1
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Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:hal-04929525

DOI: 10.2139/ssrn.4984654

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