Preferences and Altruism
Saturday, Jan. 6, 2018 8:00 AM - 10:00 AM
- Chair: Sarah Smith, University of Bristol
Moral Costs and Rational Choice: Theory and Experimental Evidence
AbstractThe literature exploring other regarding behavior sheds important light on interesting social phenomena, yet less attention has been given to how the received results speak to foundational assumptions within economics. Our study synthesizes the empirical evidence, showing that recent work challenges convex preference theory but is largely consistent with rational choice theory. Guided by this understanding, we design a new, more demanding test of a central tenet of economics—the contraction axiom—within a sharing framework. Making use of more than 325 dictators participating in a series of allocation games, we show that sharing choices violate the contraction axiom. We advance a new theory that augments standard models with moral reference points to explain our experimental data. Our theory also organizes the broader sharing patterns in the received literature.
Impure Impact Giving: Theory and Evidence
AbstractThe extant theory used to explain donor responses to third-party matched donations predicts equivalence between the price elasticities induced by a match and an appropriately set tax rebate. The extant evidence contradicts equivalence. This paper presents, for the first time, an elasticity estimate induced by a match in parallel with an estimate induced by a real-world tax rebate. The new estimates also contradict equivalence. We develop a model of impure impact giving consistent with non-equivalence. We estimate a structural version of the model, and use the structural model to obtain new insights about how matches work.
- D6 - Welfare Economics