Abstract
We use a simple laboratory experiment to measure the effect on altruism of (i) whether the participants’ choices are presented verbally or non-verbally, and (ii) whether the participants have a large amount of loose change. We find strong evidence for the first effect and weaker evidence for the second. These effects may explain some of the variation in the average level of generosity found in different Dictator Game results.
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Notes
However, it is possible that in such surveys people overestimate how much money they have given to charity. The average donation in Yörük’s data is higher than the average in data from other sources.
As noted by Meer and Rosen (2011), there is a possible endogeneity problem here too: universities with more resources may be able to approach more alumni.
There are two existing studies of charitable giving that compare laboratory and field results, although they do not investigate communication effects directly: Benz and Meier (2008) and Carlsson et al. (2013). Benz and Meier find that university students are more likely to give to a certain set of charities when invited to do so in a Dictator Game than when they are invited to do so while paying their tuition fees each semester. Here the laboratory versus field effect may be confounded by the fact that the Dictator Game earnings are a windfall gain, so Carlsson et al. use a 2 × 2 design to test for both the windfall effect and the laboratory versus field effect. They find that generosity is significantly higher when the income is a windfall rather than earned, but in addition, generosity is significantly higher in the laboratory than in the field.
Some experimental results on charitable giving are suggestive of a loose change effect. For example, in Brown et al. (2013), which is about whether people prefer to give time or money, participants earn an amount which depends on how well they complete a manual task. In one treatment they cannot donate any money to charity until they have completed the task, and in this case many participants choose to donate coins but keep notes for themselves. In Etang et al. (2012), participants are paid $20 made up of a $10 note, $5 note, two $2 coins and a $1 coin, and then invited to donate some or all of the payment to charity. Among participants choosing to donate anything the modal donation is $5, and the vast majority of those giving $5 use all of their coins.
Of the three field experiments, the one most relevant to our study involves drivers at a gas station being paid either five $1 notes, five 1$ coins, or one $5 note. In principle these treatments could be used to distinguish a coins-versus-notes effect from a denomination effect. However, as the authors note, the coin treatment is confounded by the fact that such coins are uncommon in the US and might be valuable as souvenirs. In fact, spending is lowest in the coin treatment.
In New Zealand, the smallest denomination note is the $5 note. At the time of the experiment, one New Zealand dollar was worth about 0.78 US dollars.
All sessions were run on the same day. In the morning we ran two NLC and two NMC sessions; in the afternoon we ran two VLC and two VMC sessions. A coin toss determined which sessions were less change and which were more change treatments. Participants were asked to indicate which sessions they were available for, and were randomly allocated to a session subject to their availability.
However, one of these five participants gave the whole $19: possibly this participant was an extreme altruist who would have given all of his/her payment in any treatment.
The average donation across the verbal treatments represents 12.5 % of a participant’s endowment. This is lower than in some other Dictator Games in which the recipient is a charity, but is very similar to the Reinstein and Riener (2012) “performance/cash” treatment. As in our verbal treatment, their performance/cash treatment has a strict double-blind protocol, participants are not paid a show-up fee, they have to earn their endowment, and they are paid before making a donation decision.
In results reported in an earlier version of the paper (Fielding and Knowles 2013), the verbal treatments were constructed in a slightly different way from the ones described in the main text, but included the same number of participants. In the earlier verbal treatments, participants heard the verbal solicitation while they were together in Room B, and then went one at a time into Room A to put their donation (if any) into an envelope, and the envelope into the red box. Total donations in these verbal treatments were almost identical to the ones reported in the main text, and there was a large verbal treatment effect on both the number of donations and the amount donated (p < 0.01). But in addition, within the verbal treatments the Mann–Whitney test indicated a significant loose change effect on the amount donated (p < 0.01). Pooling the two earlier verbal treatments with the two verbal treatments in the main text also produces a significant Mann–Whitney statistic for the loose change effect (p = 0.02). We suspect that there is some loose change effect at work, but this may not always be apparent unless the sample is very large.
Of course this does not invalidate the inferences made from inter-treatment differences in existing laboratory experiments.
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Acknowledgments
We are grateful to Reece Pomeroy, Robbie Bell and Andrew Tan for their invaluable work as research assistants on this project, and to Phillip Hall and Maroš Servátka for helpful suggestions on our experimental design. An earlier version of the paper was presented at the Asia Pacific Economic Science Association Conference (Auckland, February 2014) and the University of Otago Seminar Programme (Dunedin, May 2014); we are grateful to participants for the useful comments received. We are also grateful to two anonymous referees and the editor for helpful comments on an earlier draft.
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Fielding, D., Knowles, S. Can you spare some change for charity? Experimental evidence on verbal cues and loose change effects in a Dictator Game. Exp Econ 18, 718–730 (2015). https://doi.org/10.1007/s10683-014-9424-x
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DOI: https://doi.org/10.1007/s10683-014-9424-x