How Dictators Use Information about Recipients

Abstract

This paper explores the extent to which altruism is influenced by the salient features of the beneficiaries. We investigate how information presented to senders affects their perception of the recipient in a dictator game. In this environment, the starting endowment of a recipient can be inferred from choices the recipient made. Dictators give the same amount to all recipients regardless of the choices they made, despite the revealed preference to send more money to recipients who started with lower endowments. Dictators give very little when they are explicitly told that a recipient started with a high endowment. However, when dictators are only told that the recipient made a choice that indicates they started with a high endowment, dictators do not incorporate that information. Dictators are not more generous to others who made a similar financial choice to themselves, through in-group bias. An implication from our results is that charitable donors are influenced by salient information about recipients and do not try to infer deservingness beyond what is explicitly presented.

Keywords:

• Experiments
• Dictator game
• Giving
• Beliefs
• Guilt

Jel:

• C9
• C7
• D8
• D9

Acknowledgements

We thank participants at the 2021 Southern Economic Association meeting, Kirby Neilson, Gately Braxton, and TIDE Lab at the University of Alabama. Funding was provided by the University of Alabama.

Notes

1 This is different from related work on the false consensus effect by (Engelmann & Strobel, 2012) who do not control for individual reference points.

2 The purpose of using two different endowments is to create sympathy for the low-endowment subjects and to construct a situation in which choices can reveal information about starting conditions. The “coin flip” was an independent event for each subject. So, the actual distribution of low ($4) endowments was close to half of the subjects but not exactly, as we report in Table 3.

3 The single choice in Stage 1 is similar to one of the six choices faced by subjects in stage 1 in Buchanan (2020). Although the expected value of the gamble was always greater than keeping, some subjects refused the gamble.

4 Subjects were matched in groups of 2. Each of the 14 sessions has at least 4 subjects, so they do not know who their counterpart is. Each subject made decisions as if they were the dictator, although only one subject’s decision in each pair was actually randomly chosen and implemented for payment. We avoided the use of context-laden words like “dictator” and instead labeled the two roles as “green” and “blue” players in the instructions.

5 We always show the third decision screen last with the complete information about endowment and choices. The data from the full-information screen serves mainly to eliminate certain alternate explanations for what we observe in the partial-information decisions.

6 Grossman & van der Weele (2017) describe “willful ignorance” on the part of agents who want an excuse to behave selfishly. That could partially explain why our subjects are not more generous to recipients who pick Option B. It may be not self-serving to figure out what decision the recipient made in Stage 1.

7 The reason that there are slightly more $4 outcomes than $8 is that the process was determined randomly within oTree for each participant.

8 The selfish subjects gave $0 in all 4 of the first dictating decisions. The 18 dictators who gave $0 in the first four dictating decisions also gave $0 in the last 4 dictating decisions when all the information was available at the same time.

9 It might be appropriate to drop the 18 purely selfish types from the analysis. In this case, 17 (14%) out of the remaining 122 subjects are “rational” dictators, which is still a slim minority.

10 Subjects who started with $8 could have chosen to give more, in pursuit of reducing overall inequality, but that is not in their self-interest. Karadja et al. (2017) found that wealthier people in a Swedish sample were not in favor of more redistribution. Butler (2014) found that subjects who had been assigned “high status” were more compliant with social norms.