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Reluctant donors and their reactions to social information

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Abstract

This paper examines how image concerns affect the way giving behavior responds to social information. Subjects in the laboratory decide first whether they wish to donate part of their earnings to a charity, and then, conditional on opting in, decide how much to donate. They receive information on the size of a previous donation either before or after opting in, which allows one to examine the effect of the social information on the extensive and intensive margins of giving separately, and thus distinguish self-image concerns from potential alternative mechanisms. Information on a large previous donation caused subjects to opt out, but when shown only after opt-in, the same information caused subjects to increase donation amounts and did not lead to $0 donations. As further evidence of the influence of image concerns, the reaction to the social information was found to be correlated with a preference for quietly exiting a dictator game, and with scoring high on neuroticism. The results have implications for the inferences we draw about donor motives and welfare based on changes in giving in response to social information.

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Notes

  1. Related studies investigate the effect of social information on behavior in dictator, ultimatum, and public goods games, and in general also find a positive effect (Cason and Mui 1998; Keser and van Winden 2000; Fischbacher et al. 2001; Bohnet and Zeckhauser 2004). Other studies use observational data to examine the relationship between others' and one's own donations (for instance, Andreoni and Scholz 1998; Smith et al. 2015). For reviews of the motivations for charitable giving more generally, see Vesterlund (2006, 2016) and Andreoni and Payne (2013).

  2. On moral wiggle room, and willful ignorance, see also in Larson and Capra (2009), Matthey and Regner (2011), Feiler (2014), Grossman (2014), van der Weele et al. (2014), Regner (2018), and Serra-Garcia and Szech (2019). Relatedly, Exley and Petrie (2018) show that people find ways to decline a solicitation simply by being given time to decide. A related literature shows that donors avoid being asked to donate if they can anticipate the ask, but otherwise donate (DellaVigna et al. 2012; Kamdar et al. 2015; Trachtman et al. 2015; and Andreoni et al. 2017). For a discussion on the tendency of individuals to exploit contextual justifications to act selfishly, see Gino et al. (2016) and the literature section in Exley and Kessler (2019).

  3. Thus, this paper enters the literature on the demand side of giving, that studies fundraising strategies and their effect on giving. See for instance List and Lucking-Reiley (2002) on seed money, Eckel and Grossman (2003) and Karlan and List (2007) on rebates and matches, Krupka and Croson (2016) on normative cues, and Argo et al. (2020) on goal completion. The paper also adds to the literature on social influence more generally on giving behavior (see for instance Meer 2011; Linardi and McConnell 2011; Samek and Sheremeta 2014; Castillo et al. 2014, 2017), and a large literature on the effect of social information on prosocial behavior, including on energy consumption (Allcott 2011), tax compliance (Hallsworth et al. 2017), and prosocial job choice (Coffman et al. 2017).

  4. Pittsburgh Cares is a Pittsburgh-local nonprofit that promotes volunteerism by connecting other nonprofits in need of volunteers with individuals who are looking for volunteering opportunities. Pittsburgh Cares does not target a particular population or issue, which helps to lessen concerns that donations in the experiment were driven by unobserved characteristics of the subjects (such as political views).

  5. All subjects received an envelope and a receipt form that they needed to complete if they wanted to get a receipt for their donation from the charity. To prevent subjects from identifying who donated and who did not based on their filling the envelope, all subjects were asked to put their receipt form (even if left blank) in their envelope, seal the envelope, and place the envelope on their desks.

  6. In Dana et al. (2006), dictators and recipients are kept in separate rooms, and the exit decision is a binary choice between the initial dictator allocation and a $9-$0 allocation that also leaves the recipient unaware that the game was played. By eliciting probabilities between 10 and 90% rather than 0 to 100% or a binary choice, I am able to implement a quiet exit of the dictator game while keeping all subjects in the same room. This is because with the [10–90] interval, there is always at least a 10% probability for each allocation to get implemented, and thus subjects cannot infer what probability the partner indicated even in the event that $9-$0 gets implemented. The [10–90] dictator-exit game also generates a continuous measure of exit preferences, with one observation per subject, and maintains common knowledge of the instructions at all times of the game. This contrasts with past implementations of the dictator-exit game that keep dictators and recipients in separate rooms (Dana et al. 2006; Broberg et al. 2007; and Lazear et al. 2012). Since keeping subjects in separate rooms may complicate experiment logistics and decrease the number of usable observations, a mechanism such as the one I use could be useful for eliciting exit preferences in general settings, as a way to obtain a more nuanced picture of an individual’s altruistic preferences than what is obtained with the dictator game alone. This is relevant in light of concerns that giving in the dictator game does not necessarily reflect altruism (Bardsley 2008; List 2007), and recent interest in eliciting moral preferences (Bénabou et al. 2018). Klinowski (2018) shows that exit in this game helps to explain gender differences in giving in the dictator game.

  7. All regressions in this section control for the participant's age, gender, and pre-donation earnings, unless explicitly noted otherwise. Pre-donation earnings in the experiment were fairly homogeneous across subjects (82% of subjects earned $15, and 98% of subjects earned either $13.5 or $15).

  8. Figure A1 shows similar graphs for all treatments.

  9. As noted previously, in the treatments that did not provide information in stage 1, all but one subjects who opted into stage 2 donated a positive amount. Therefore, the donation amount conditional on opting in is practically identical to the donation amount conditional on a positive donation.

  10. Results are similar using a linear hurdle model, also proposed by Cragg (1971), which differs from the lognormal hurdle model only in that the amount equation assumes that donations are normally distributed truncated at zero, rather than lognormally distributed. A Vuong test comparing the fit of the two hurdle models fails to reject the null hypothesis of equal fit (p = 0.600).

  11. The increase in opt-in in 50¢-stage-1, and the directional increase in donation amounts in 50¢-stage-2 relative to no-information are, also, potentially suggestive of image concerns. If 50¢ is considered too small a donation to reflect well on one's generosity, information about a 50¢ donation might have brought this consideration into the subject's attention, causing her to increase giving in order to avoid appearing ungenerous. This is consistent with Cialdini and Schroeder (1976), who write: "When the most minimal of monetary donations is said to be acceptable, excuses for failing to help that might ordinarily be offered (e.g. `I can't afford to give to all the various charities'; `We're too low on money this week', etc.) become inapplicable." At the same time, solicitees are unlikely to respond in this case with a small donation, because doing so would "jeopardize personal image." (Cialdini and Schroeder 1976).

  12. Dana et al. (2006) and Broberg et al. (2007) also find that dictators who transfer larger amounts are more likely to exit. Note that selecting a probability larger than 10% after transferring $0 or $1 is consistent with image concerns: such behavior might indicate that the subject was willing to pay a cost of $1, or impose a cost of $1 on the recipient, in order to hide from the recipient the fact that she chose a relatively selfish transfer.

  13. For this reason it is helpful to distinguish generous participants from selfish participants, even though both types indicated an exit probability equal to 10%. Since generous participants transferred some amount in the dictator game, they are potentially more likely to be altruists to some extent.

  14. If the amount transferred in the dictator game is a proxy for the subject's level of altruism, one might worry that the interaction effects in column 2 of Table 2 are evidence of the altruism channel rather than image concerns, since subjects who selected larger exit probabilities also tended to transfer larger amounts in the dictator game. To give evidence that image concerns and not altruism drive the interaction effects, Table A3 replicates column 2 of Table 2, now controlling for the amount transferred in the dictator game (column 1), or restricting the sample to dictators who transferred at least $4 (column 2), in order to control for the subject's level of altruism. In both cases the interaction effects continue to be significant.

  15. This result is in line with other findings of individual consistency in prosocial behavior. For instance, Dariel and Nikiforakis (2014) find that cooperation in a public-good game predicts reciprocation in a subsequent gift-exchange game.

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Klinowski, D. Reluctant donors and their reactions to social information. Exp Econ 24, 515–535 (2021). https://doi.org/10.1007/s10683-020-09670-y

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