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Income effect and altruism

Subhashish Chowdhury and Joo Young Jeon
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Subhashish Chowdhury: University of East Anglia

No 12-04, Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) from School of Economics, University of East Anglia, Norwich, UK.

Abstract: We investigate the consequences of a pure income effect on the altruistic behavior of donors. Inequity aversion theories predict either no effect or a decrease in giving, whereas warm-glow theory predicts an increase in giving with an increase in the common income of donor and receiver. Theoretical predictions being contradictory, we run a dictator game in which we vary the common show-up fee of both the dictator and the recipient, but keep an extra amount to be shared the same. The prediction of the warm-glow theory is supported.

Keywords: dictator game; altruism; income effect; inequity aversion; warm-glow (search for similar items in EconPapers)
JEL-codes: C91 D03 D64 (search for similar items in EconPapers)
Date: 2012-10-01
New Economics Papers: this item is included in nep-cbe, nep-evo, nep-exp and nep-soc
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