Rational Altruism? On Preference Estimation and Dictator Game Experiments

Abstract

Experimental implementations of dictator games are found to differ in terms of their underlying strategic incentives. We explore this discovery in two separate directions. Theoretically, assuming identical other-regarding preferences, we show that the two most widely used protocols can generate strongly contrasting rational-choice predictions, from which different interpretations of dictator giving arise. Experimentally, a tailor-made experiment reveals signiffcant differences between the two protocols but rejects full rationality as a satisfactory explanatory theory. Our findings indicate that several previously drawn conclusions regarding other-regarding preferences among humans distinguished by social class, gender, generation, nationality, etc. may be more ambiguous than hitherto believed.

Keywords: Giving, Charitable giving, Dictator games, CES utility functions, Distributional preferences, Social preferences, Experimental economics, Foundations

JEL Classification: A13, C72, D01, D64