poly: Warm-Glow, not Altruism

From: Robin Hanson <hanson@econ.berkeley.edu>
Date: Thu May 14 1998 - 09:22:50 PDT

I'd like to call your attention to the following excellent paper
by one of my advisors (Palfrey):

     "Anomalous Behavior in Public Goods Experiments: How Much
      and Why?"
          THE AMERICAN ECONOMIC REVIEW (December 1997)

            California Institute of Technology
            Federal Communications Commission

          Contact: Thomas R. Palfrey
          E-Mail: MAILTO:trp@hss.caltech.edu
          Postal: California Institute of Technology, Division
                    of the Humanities and Social Science, 1200
                    East California Blvd., 301A Baxter Hall
                    Pasadena, California 91125
          Phone: (626) 395-4088
          Fax: (626) 432-1726
          Co-Auth: MAILTO:jprisbre@fcc.gov

     We report the results of voluntary contributions
     experiments where subjects are randomly assigned different
     rates of return from their private consumption. These
     random assignments are changed round to round, enabling the
     measurement of individual player contribution rates as a
     function of that player's investment cost. We directly test
     these response functions for the presence of warm-glow
     and/or altruism effects. We find significant evidence for
     heterogeneous warm-glow effects that are, on average, low
     in magnitude. We statistically reject the presence of an
     altruism effect.

     JEL Classification: C92, C92, H41

This is a very good careful experiment addressing the previously
puzzling behavior of people voluntary contributing to group welfare
beyond what would benefit them personally. These groups are strangers,
with no kin ties, and no substantial possibility of reciprocation,
reputation, or similar effects. The bottom line seems to be that
people just feel good about giving, regardless of how useful such
giving actually turns out to be for other people.

Robin Hanson
hanson@econ.berkeley.edu http://hanson.berkeley.edu/
RWJF Health Policy Scholar, Sch. of Public Health 510-643-1884
140 Warren Hall, UC Berkeley, CA 94720-7360 FAX: 510-643-8614
Received on Thu May 14 16:28:45 1998

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