Giving Back

Kevin Lewis

January 05, 2010

Testosterone Administration Decreases Generosity in the Ultimatum Game

Paul Zak, Robert Kurzban, Sheila Ahmadi, Ronald Swerdloff, Jang Park, Levan Efremidze, Karen Redwine, Karla Morgan & William Matzner
PLoS ONE, December 2009, e8330

How do human beings decide when to be selfish or selfless? In this study, we gave testosterone to 25 men to establish its impact on prosocial behaviors in a double-blind within-subjects design. We also confirmed participants' testosterone levels before and after treatment through blood draws. Using the Ultimatum Game from behavioral economics, we find that men with artificially raised T, compared to themselves on placebo, were 27% less generous towards strangers with money they controlled (95% CI placebo: (1.70, 2.72); 95% CI T: (.98, 2.30)). This effect scales with a man's level of total-, free-, and dihydro-testosterone (DHT). Men in the lowest decile of DHT were 560% more generous than men in the highest decile of DHT. We also found that men with elevated testosterone were more likely to use their own money to punish those who were ungenerous toward them. Our results continue to hold after controlling for altruism. We conclude that elevated testosterone causes men to behave antisocially.


Testing for Altruism and Social Pressure in Charitable Giving

Stefano DellaVigna, John List & Ulrike Malmendier
NBER Working Paper, December 2009

Every year, 90 percent of Americans give money to charities. Is such generosity necessarily welfare enhancing for the giver? We present a theoretical framework that distinguishes two types of motivation: individuals like to give, e.g., due to altruism or warm glow, and individuals would rather not give but dislike saying no, e.g., due to social pressure. We design a door-to-door fund-raising drive in which some households are informed about the exact time of solicitation with a flyer on their door-knobs; thus, they can seek or avoid the fund-raiser. We find that the flyer reduces the share of households opening the door by 10 to 25 percent and, if the flyer allows checking a `Do Not Disturb' box, reduces giving by 30 percent. The latter decrease is concentrated among donations smaller than $10. These findings suggest that social pressure is an important determinant of door-to-door giving. Combining data from this and a complementary field experiment, we structurally estimate the model. The estimated social pressure cost of saying no to a solicitor is $3.5 for an in-state charity and $1.4 for an out-of-state charity. Our welfare calculations suggest that our door-to-door fund-raising campaigns on average lower utility of the potential donors.


Gendered Congregations, Gendered Service: The Impact of Clergy Gender on Congregational Social Service Participation

Michelle Stewart-Thomas
Gender, Work & Organization, forthcoming

Using data from the 1998 National Congregations Study, I present empirical evidence that shows that the gender of a congregation's leadership makes a difference in the likelihood that a congregation will participate in a social service programme. The results from binary logistic regression indicate that the odds of congregations with women head clergy participating in a social service programme are four times greater than those with men head clergy. In addition, as the percentage of women on a congregation's governing board increases the probability that a congregation will participate in a service project also increases. The specific types of social service programmes a congregation pursues also differ by gender of leadership, with women-led congregations significantly more likely to pursue service projects that could be labelled feminine while avoiding programmes that are clearly feminist. To explain this gendered behaviour I incorporate Acker's (1990) theory of gendered organizations.


Cooperative Behaviour Cascades in Human Social Networks

James Fowler & Nicholas Christakis
University of California Working Paper, August 2009

Theoretical models suggest that social networks influence the evolution of cooperation, but to date there have been few experimental studies other than those that focus on coordination rather than cooperation. Observational data suggest that a wide variety of behaviours may spread in human social networks, but subjects in such studies can choose to befriend people with similar behaviors, posing difficulty for causal inference. Here, we exploit a seminal set of laboratory experiments which originally showed voluntary costly punishment can help sustain cooperation. In these experiments, subjects were randomly assigned to a sequence of different groups in order to play a series of public goods games with anonymous strangers; this allows us to draw networks of interactions to explore how cooperative behavior spreads from person to person. We show that in both an ordinary public goods game and a public goods game with punishment, focal individuals ("egos") are influenced by fellow group members ("alters") in future interactions with others. Furthermore, this influence persists for multiple periods and spreads up to three degrees of separation (from person to person to person to person). The results suggest that each additional contribution a subject makes to the public good in the first period is tripled over the course of the experiment by other subjects who are directly or indirectly influenced to contribute more as a consequence. These are the first results to show experimentally that cooperative behavior cascades in human social networks.


Saving the Lives of Strangers: Humane Societies and the Cosmopolitan Provision of Charitable Aid

Amanda Bowie Moniz
Journal of the Early Republic, Winter 2009, Pages 607-640

This article explores the contribution of humane societies - organizations that promoted the rescue and resuscitation of victims of drowning and certain other accidents - to Americans' and Britons' mastery of aid to strangers in the late eighteenth and early nineteenth centuries. By 1800, these little-known groups were among the most cosmopolitan philanthropies in the Anglophone world. The humane societies founded in the 1770s and the first half of the 1780s had not started out with catholic outlooks. Indeed, their founders wondered how many people the charities would help, raising questions about the relationship between social ills and eleemosynary projects. Philadelphia burial records as well as newspaper accounts from several cities indicate that the actual incidence of drowning did not lead to the formation of humane societies; rather, the perceived danger united people across regions and backgrounds. Although their claims were exaggerated, humane societies in London, Massachusetts and Philadelphia engaged in beneficence without regard to the ethnic, religious, occupational, or personal ties that had structured access to charitable relief for much of the eighteenth century, and American humane societies even recognized the role of African Americans as lifesavers. These groups belonged to a larger shift among American and British philanthropists towards helping people, either locally or at a distance, for whom earlier activists would have felt no charitable obligation. Although not unique, humane societies fostered great confidence about the possibilities of moral responsibility to all humankind because of the tightly focused, yet potentially universal, nature of their programs.


Social Comparisons and Contributions to Online Communities: A Field Experiment on MovieLens

Yan Chen, Maxwell Harper, Joseph Konstan & Sherry Xin Li
American Economic Review, forthcoming

We design a field experiment to explore the use of social comparison to increase contributions to an online community. We find that, after receiving behavioral information about the median user's total number of movie ratings, users below the median demonstrate a 530-percent increase in the number of monthly movie ratings, while those above the median decrease their ratings by 62-percent. When given outcome information about the average user's net benefit score, above-average users mainly engage in activities that help others. Our findings suggest that effective personalized social information can increase the level of public goods provision.


Cooperation for reputation: Wasteful contributions as costly signals in public goods

Mark Van Vugt & Charlotte Hardy
Group Processes & Intergroup Relations, January 2010, Pages 101-111

Why do people persistently contribute to public goods and does it matter to them if their donation makes a difference? A costly signalling perspective suggests that donors might be more concerned about their reputation than the utility of their helping act. We report data on two step-level public goods experiments. We find that in public (vs. private) conditions, contributions go up even when the public good is already provided (Experiment 1) or is unattainable (Experiment 2). Furthermore, these conspicuous donations appear to enhance the status and prestige of the donor because they signal some hidden quality. This research suggests that a public good contribution can be a self-presentation strategy and that the benefits of these contributions to society are sometimes of secondary importance.


Preschoolers' Allocations in the Dictator Game: The Role of Moral Emotions

Michaela Gummerum, Yaniv Hanoch, Monika Keller, Katie Parsons & Alegra Hummel
Journal of Economic Psychology, forthcoming

Economic research has proposed that emotions like anger, guilt, and other moral emotions might be important causes of strong reciprocity, the willingness to sacrifice own resources for others. This study explores how 3- to 5-year-old children allocate resources in the dictator game, and whether participants' understanding of moral emotions predicted allocations. Participants judged moral rule violations, attributed emotions to hypothetical violators and to the self as violator, and judged the character of the violator. Attribution of negative (guilt) feelings to the self after a violation and character evaluation of the violator as well as age and gender significantly predicted allocations in the dictator game. The implications of these results are discussed for economic research on altruism and strong reciprocity and psychological research on the development of moral emotions.


The Geography of Giving: The Effect of Corporate Headquarters on Local Charities

David Card, Kevin Hallock & Enrico Moretti
Journal of Public Economics, forthcoming

Does the presence of corporate headquarters in a city affect the incomes of local charities? To address this question we combine data on the head office locations of publicly traded U.S. firms with information on the receipts of local charitable organizations. Cities like Houston, San Jose, and San Francisco gained significant numbers of corporate headquarters over the past two decades, while cities like Chicago and Los Angeles lost. Our analysis suggests that attracting or retaining the headquarters of a publicly traded firm yields approximately $3-10 million per year in contributions to local non-profits. Likewise, each $1000 increase in the market value of the firms headquartered in a city yields $0.60-1.60 to local non-profits. Most of the increase in charitable contributions is attributable to an effect on the number of highly-compensated individuals in a city, rather than through direct donations by the corporations themselves. The increased private sector donations from the presence of corporate headquarters do not seem to crowd out government grants to local charities.


Does the Incentive Effect of the Charitable Deduction Vary Across Charities?

Robert Yetman & Michelle Yetman
University of California Working Paper, July 2009

We examine how taxes affect the amounts of donations given to charities and, in particular, how the sensitivity of donations to taxes varies across different types of charities. Prior studies generally constrained tax price elasticities to be constant across charities not by choice, but rather by empirical necessity, as the data used in those studies (i.e., individual income tax returns) do not break out donations by type of charity. Unlike prior studies, which estimated the tax price elasticity of donations given, we use charity-level data to estimate the tax price elasticity of donations received. We find significant differences in the response of donations to taxes across different types of charities. Donations to charities that provide basic goods and services to humans in need appear to be unresponsive to tax incentives, while donations to charities that appeal to higher human needs, animals, and the environment are very sensitive to tax incentives. These results suggest that changes to tax laws that affect the price of giving would likely lead to a reallocation of relative donations across different types of charities.


Positive Interactions Promote Public Cooperation

David Rand, Anna Dreber, Tore Ellingsen, Drew Fudenberg & Martin Nowak
Science, 4 September 2009, Pages 1272-1275

The public goods game is the classic laboratory paradigm for studying collective action problems. Each participant chooses how much to contribute to a common pool that returns benefits to all participants equally. The ideal outcome occurs if everybody contributes the maximum amount, but the self-interested strategy is not to contribute anything. Most previous studies have found punishment to be more effective than reward for maintaining cooperation in public goods games. The typical design of these studies, however, represses future consequences for today's actions. In an experimental setting, we compare public goods games followed by punishment, reward, or both in the setting of truly repeated games, in which player identities persist from round to round. We show that reward is as effective as punishment for maintaining public cooperation and leads to higher total earnings. Moreover, when both options are available, reward leads to increased contributions and payoff, whereas punishment has no effect on contributions and leads to lower payoff. We conclude that reward outperforms punishment in repeated public goods games and that human cooperation in such repeated settings is best supported by positive interactions with others.

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