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Principal Investigator: James Andreoni, University of California, San Diego
Economic research on giving, altruism and generosity has focused almost exclusively on understanding individual choices and motives, or on the total effect of economic policies. Researchers have asked, does giving respond to the charitable deduction in income taxes? Is giving affected by matching grants? Do people donate out of pure or impure altruism? Are the wealthy different from others? How does the estate tax affect giving? Do government grants crowd out private donations? While these questions are important, recent research indicates that there are more basic questions to be asked about generosity when we begin by acknowledging that giving is a fundamentally social act. Generosity understood in this way involves not just the consideration of others, but also usually contact between those providing the generous action and those receiving or requesting it. Moreover, because it is social, it is prone to manipulation by norms, the expectations of others and expectations of one’s self.
There are many intriguing new examples of how social context affects giving. More ethnically and religiously diverse communities give less to charity. Experiments have shown that when a person’s identity is revealed to others her generosity increases, but if people can take actions to avoid being identified or avoid even participating in altruistic interactions, then many are willing to pay to do so. In experiments that allow controlled communication between subjects, generosity increases the more communication increases; and when recipients are allowed to ask for a gift, they tend either to get what they ask for or nothing at all.
These findings all point to the fact that acting in the interest of others is a complex social exchange that depends on the degree of interaction one has with others, on what people believe others will do, on how people judge others, and on how much people care about being judged. All of these factors can and do have tremendous impacts on giving decisions and are ripe for deeper economic investigation. This project does just this in a four-part research effort.
The first part of the project focuses on the power of asking. Why is it so difficult to refuse when someone asks for a contribution, be it a charity, girlscout, beggar, or friend? This project asks why people say “yes.” How do people protect themselves from being saturated with requests? What strategies do people use to say no? Finally, how can and do charities shape their fundraising appeals in light of knowledge gained by asking these questions?
The second part of the project is an ambitious plan to develop and implement a new fundraising mechanism based on small scale matching gifts. If individuals can repeatedly make small binding offers, saying, for instance, “I’ll give $50 if matched with others who give $500 in total,” then we can potentially overcome the two key problems about giving to charity: information and commitment. Both problems are addressed by increasing giving in small increments and, importantly, by allowing people to “name their price” through the match.
Third is a laboratory study on everyday-life mechanisms for assuring compliance with other-regarding norms. Andreoni begins with recent evidence that shows that peer punishment is not sustainable and leads to unproductive revenge cycles. Instead he offers an intuitive method of third-party enforcement that is natural, has small punishments and leads to efficient other-regarding behavior.
Fourth is a project on the power of moral suasion. Economists have been trained to think of preferences as things beyond the reach of policy makers. But sociologists, psychologists, neuroscientists, and recently, some economists, are disputing this stark position. Here we propose a theoretical and experimental project on how moral suasion can first change external expectations, eventually becoming internalized, and finally altering the sincere motives and preferences of individuals. In particular, a policy that is directed toward changing moral attitudes—not simply economic costs and benefits—can be an important key to advancing social change.
