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Climate change policies have been rising to the top of the global political agenda, but how should governments finance them? Public economists propose solutions based on economic theory, but their political feasibility depends on voters’ support, and ordinary households often neglect economic theory and have different views about efficiency and fairness. We design a large-scale information experiment to assess a representative population’s beliefs about alternative forms of financing. We randomly provide information about which groups contribute more to or benefit from climate change and compare the support for alternative financing schemes across informed and uninformed consumers. Informed consumers strongly support the introduction of a VAT-style CO2 tax after learning that the rich contribute more to climate change than the poor, but do not support increasing taxes on older people when learning that they also pollute more. Moreover, consumers who learn that certain populations, due to luck, gain economically from climate change strongly oppose redistribution from gainers to losers of climate change. Consumers also oppose financing policies to fight climate change via public debt, implying higher costs for future generations. Market-based solutions, such as private insurance for those exposed to climate-change risk, are strongly opposed across the board.

Understanding demand for state regulation is a foundational issue for social science. To account for this demand, existing theories rooted in market failure and government failure have focused on various forms of trust, but have paid little attention to fear. We test how fear and trust shape demand for government regulation by drawing on especially precise measures of Covid-related regulations gathered in a survey of more than 23,000 respondents in 61 Russian regions. We show that fear of contracting the virus is directly related to greater demand for regulation. In addition, the impact of trust is conditional on the level of fear. Higher interpersonal trust is related to lower demand for Covid-19 regulation, while higher institutional trust is associated with greater demand, but, provided fear is sufficiently great, demand for regulation will be high regardless of levels of interpersonal and institutional trust. These results inform debates about theories of regulation, identify critical scope conditions for existing research on trust and demand for regulation, and open a fruitful line of research by examining how fear of social bads shapes support for state intervention.

The provision of social incentives in the workplace, where performance benefits a charitable cause, has been frequently used in modern organizations. In this paper, we quantify the impact of social incentives on performance under two incentive schemes: piece rate and a winner-take-all tournament. We introduce social incentives by informing individuals that 50% of their performance earnings will be donated to a charity of their own choice. Our findings indicate that, in the presence of social incentives, women increase their performance by approximately 23% and 27% in the piece rate and tournament payment schemes, respectively. These effects are sizable and significant. Despite the fact that women also become more confident when social incentives are used, their willingness to compete is not affected due to their general lack of willingness to take financial risks.

We provide novel evidence on the linkages between capital taxation and charitable giving on three fronts. First, we use quasi-experimental variation in the annual Norwegian wealth tax to study the effect on how much households give. Inconsistent with the notion that households give more in order to reduce future wealth taxes, we find a small negative effect. This is effect is entirely driven by households paying more in wealth taxes. The extensive-margin variation has no effect, which suggests an absence of intertemporal substitution effects in giving. Second, we study bunching at an income-tax exemption threshold for giving and estimate a modest own-price elasticity that is decreasing in income, age, and wealth. Third, we show that these nominally unrelated tax incentives interact: wealth taxation increases the after-tax own-price elasticity of giving. Overall, our evidence is consistent with modest effects of capital taxation on charitable giving that are primarily driven by income effects.

In this paper we demonstrate how the impure public good model can be converted into a pure public good model with satiation of private consumption, which can be handled more easily, by using a variation of the aggregative game approach as devised by Cornes and Hartley (2007). We point out the conditions for impure public good utility functions that allow for this conversion through which the analysis of Nash equilibria can be conducted in a unified way for the impure and the pure public good model and which facilitates comparative statics analysis for impure public goods. Our approach also offers new insights on the determinants for becoming a contributor to the public good in the impure case as well as on the non-neutral effects of income transfers on Nash equilibria when the public good is impure.

We report experimental findings on the role of charitable promises in bargaining settings. We vary the enforceability of such promises within variants of ultimatum games where the proposer suggest a split between himself, the responder and a char-itable donation. By reneging on initial pledges, dishonest proposers can turn the bargaining power to their advantage. Providing ex post information on actual dona-tions while leaving the contract incomplete outperforms a complete contract where proposers cannot renege on their charitable promises. The ex post information allows proposers to improve their (self-)image by voluntarily giving more than pledged and thus proving that the charitable pledge was not used for strategic reasons. We identify proposer competition as another (surprising) mechanism that partly eliminates cheat-ing among accepted offers. We relate our findings to calls for information provision on actual CSR activities within the management literature.

We explore the link between online salience and charitable donations. Using a unique dataset on phone text donations that includes detailed information on the timing of cash gifts to charities, we link donations to time variation in online searches for words that appear in those charities’ mission statements. The results suggest that an increase in the online salience of the activities pursued by different charities affects the number and volume of donations made to those charities and to charities that pursue different goals. We uncover evidence of positive “own-salience” effects and negative “cross-salience” effects on donations.

We document individual willingness to fight climate change and its behavioral determinants in a large representative sample of US adults. Willingness to fight climate change - as measured through an incentivized donation decision - is highly heterogeneous across the population. Individual beliefs about social norms, economic preferences such as patience and altruism, as well as universal moral values positively predict climate preferences. Moreover, we document systematic misperceptions of prevalent social norms. Respondents vastly underestimate the prevalence of climate- friendly behaviors and norms among their fellow citizens. Providing respondents with correct information causally raises individual willingness to fight climate change as well as individual support for climate policies. The effects are strongest for individuals who are skeptical about the existence and threat of global warming.

Reporting private information is a key part of economic decision making. A recent literature has found that many people have a preference for honest reporting, contrary to usual economic assumptions. In this paper, we investigate whether preferences for honesty are malleable and what determines them. We experimentally measure preferences for honesty in a sample of children. As our main result, we provide causal evidence on the effect of the social environment by randomly enrolling children in a year-long mentoring programme. We find that, about four years after the end of the programme, mentored children are significantly more honest.

Charitable fundraisers frequently announce giving by others, and research shows that this can increase donations. However, this mechanism may not put information about peers to the most efficient use if it is costly to inform individuals who are indifferent to peer actions or causes some individuals to give less. We investigate whether a simple mechanism without incentives can predict heterogeneity in charitable responses to peer decisions. We elicit beliefs about donations in a baseline solicitation, and in subsequent solicitations we randomly assign information about others’ donations. We find that elicited beliefs are often logically inconsistent and that many subjects fail to update beliefs when treated. However, elicited beliefs can predict heterogeneous treatment effects if individuals are engaged and the information is salient.

This paper combines several large-scale surveys with different identification strategies to shed new light on the determinants of cooperative behavior. We provide evidence indicating that the well-being maximizing level of trust is above the income maximizing level. Higher trust is also linked to more cooperative and pro-social behaviors, including the private provision of global public goods such as climate change mitigation. Consistent with "warm glow" theories of pro-social behavior, our results show that individuals may enjoy being more cooperative than what would lead them to maximize their income, which is reflected in higher levels of well-being.

We study how an individual's compliance with social norms is inuenced by other actors' norm compliance. In a repeated non-strategic Take-or-Give donation experiment we show that giving is considered socially appropriate while taking is socially inappropriate. Observing norm violations erodes an individual's own norm compliance. We show that the erosion of norm compliance is led by a change in norm-related beliefs. This change has a major effect on individuals who initially obey the norm, driving them to non-compliance, whereas initially non-compliant individuals do not change their taking behavior. Erosion is halted when individuals have even minimal social proximity to those they observe: individuals now also pay attention to norm followers.

This paper uses a novel experimental design to study the contagion of pro- and antisocial behavior and the role of social proximity among peers. Across systematic variations thereof, we find that anti-social behavior is generally more contagious than pro-social behavior. Surprisingly, we also find that social proximity amplifies the contagion of anti-social behavior more strongly than the contagion of pro-social behavior, and that anti-social individuals are most susceptible to behavioral contagion of other anti-social peers. These findings paired with the methodological contribution are informative for the design of effective norm-based policy interventions directed at facilitating (reducing) pro- (anti-)social behavior in social and economic environments.

We consider a model where agents differ in their ‘types’ which determines their voluntary contribution towards a public good. We analyze what the equilibrium composition of groups are under centralized and centralized choice. We show that there exists a top-down sorting equilibrium i.e. an equilibrium where there exists a set of prices which leads to groups that can be ordered by level of types, with the first k types in the group with the highest price and so on. This exists both under decentralized and centralized choosing. We also analyze the model with endogenous group size and examine under what conditions is top-down sorting socially efficient. We illustrate when integration (i.e. mixing types so that each group's average type if the same) is socially better than top-down sorting. Finally, we show that top down sorting is efficient even when groups compete among themselves.

Building on the epidemiological SIR model we present an economic model with heterogeneous individuals deriving utility from social contacts creating infection risks. Focusing on social distancing of individuals susceptible to an infection we theoretically analyze the gap between private and social cost of contacts. To quantify this gap, we calibrate the model using German survey data on social distancing and impure altruism from the beginning of the COVID-19 pandemic. The optimal policy reduces contacts drastically in the beginning, to almost eradicate the epidemic, and keeps them at around a third of pre-pandemic levels with minor group-specific differences until a vaccine becomes tangible. Private protection efforts stabilize the epidemic in the laissez faire, though at a prevalence of infections much higher than optimal. Impure altruistic behaviour closes more than a quarter of the initial gap towards the social optimum. Our results suggests that private actions for self-protection and for the protection of others contribute substantially toward alleviating the problem of social cost.

Both theory and recent empirical evidence on nudging suggest that observability of behavior acts as an instrument for promoting (discouraging) pro-social (anti-social) behavior. We connect three streams of literature (nudging, social preferences, and social norms) to investigate the universality of these claims. By employing a series of high-powered laboratory and online studies, we report here on an investigation of the questions of when and in what form backfiring occurs, the mechanism behind the backfiring, and how to mitigate it. We find that inequality aversion moderates the effectiveness of such nudges and that increasing the focus on social norms can counteract the backfiring effects of such behavioral interventions. Our results are informative for those who work on nudging and behavioral change, including scholars, company officials, and policy-makers.

We study donor loyalty in the context of church membership in Germany. Church members have to make substantial payments to their church but can opt out at any time. In a large-scale field experiment, we examine how private recognition for past payments affects church members’ loyalty. We find that recognizing past payments in a letter significantly reduces opt-outs. This effect is driven by members in the bottom quartile of baseline payments to the church. Consistent with optimization frictions prior to the experiment, we observe a spike in opt-outs immediately after treatment for particularly costly memberships.

Transfers motivated by altruism, norms of giving, and guilt play an important role in supporting individuals who suffer losses due to risk. We present empirical evidence from an artefactual field experiment in Ethiopia in which we introduce formal insurance in a setting where donors make redistributive transfers to anonymously paired recipients. We find that donors reduce their transfers to recipients who don’t take-up insurance, and that this effect is larger for donors who hold the ex ante belief that the recipient is more likely to take-up insurance. The findings are consistent with a model of a norm of giving where donors feel guilty for deviating from the norm. The feelings of guilt decline with the expected social distance, that is revealed by the recipients’ observable insurance uptake decisions. The model highlights how the introduction of formal insurance may erode norms of giving and lead vulnerable groups to face more volatile consumption.

What is the value of pledges if they are often reneged upon? In this paper we show - both theoretically and experimentally - that pledges can be used to screen donors and to better understand their motives for giving. In return, nonprofit managers can use the information they glean from pledges to better target future charitable giving appeals and interventions to donors, such as expressions of gratitude. In an experiment, we find that offering the option to pledge gifts induces self-selection. If expressions of gratitude are then targeted to individuals who select into pledges, reneging can be significantly reduced. Our findings provide an explanation for the potential usefulness of pledges.

We use a laboratory experiment to identify the impact of risk in the private and public dimensions of social investments. In variants of a public good game, we separate the return a subject’s investment generates for herself vs. the return to others. We find a detrimental effect of risk on public good provision when returns in both dimensions are risky and positively correlated or independent. A negative correlation limits the downside risk and leads to more stable social investments. Disentangling the impact of risk in the two dimensions, we find that investments particularly respond to the risk in the public return dimension.

Can social norms affect fundamental patterns of behavior such as income effects? Studies of determinants of giving to charities and other individuals yield a wide range of income-effect estimates. We conduct two experiments to first test whether the effect of income on charitable giving depends on whether the income is earned and then test whether any difference in the effects by income source can be explained by social norms. Our first experiment induces random variation in both earned income and windfall bonuses and shows that only bonuses increases charitable donations. The second experiment uses an incentivized coordination game to investigate whether social norms can explain this donation pattern. Perceptions of what most people would consider a morally appropriate donation depend on the amount of income and whether it is a windfall. The norms elicited in the second experiment match the donation patterns in the first experiment both overall and across subject demographics, pointing to social norms as a key determinant of charitable giving.

Charitable donations provide positive externalities and can potentially be increased with an understanding of donor preferences. We obtain a uniquely comprehensive characterization of donation motives using an experiment that varies treatments between and within subject. Donations are increasing in peers’ donations, past subjects’ donations, and bonus income. These findings of peer and income effects do not extend to earned income, anonymous donations, or peers’ donations of bonus income. A model of an uncertain social norm for giving can explain the patterns here and in several strands of past research. Estimation of the model reveals substantial heterogeneity in subjects’ adherence to the norm and perceptions of its form. Correlations between these dimensions of preferences are such that charities with perfect information could increase net revenue using targeted give-aways to certain donors. A simpler fundraising strategy using only the social dimension of donor preferences increases donations by 30 percent.

This paper estimates the effects of tax incentives on charitable contributions in the UK, using the universe of self-assessment income tax returns between 2005 and 2013. We exploit variation from a large reform in 2010 to estimate intensive and extensive-margin tax-price elasticities of giving. Using a predicted-tax-rate instrument for the price of giving relative to consumption, we find an intensive-margin elasticity of about -0.2 and an extensive-margin elasticity of -0.1, yielding a total elasticity of about -0.3. To further explore the extensive-margin response, we propose a model with a fixed cost of declaring donations and obtain a structural estimate of that cost of around £47. We also study the welfare effects of tax incentives, extending the theoretical literature to allow for extensive-margin giving and for a fixed cost of declaring donations. Taking into account these factors, there is a case for increasing the subsidy on charitable giving in the UK.

This paper brings an important empirical contribution to the academic literature by examining whether gender differences in tax compliance are due to higher prosociality among women. We conducted a large cross-national tax compliance experiment carried out in Italy, U.K., U.S., Sweden, and Romania, and assessed tax compliance as reported income as a percentage of total earned income in the experiment. We uncover that women declare a significantly higher percentage of their income than men in all five countries. While some scholars have argued that differences in honesty between men and women is actually being mediated by the fact that women are more prosocial than men, we find that women are not more prosocial than men in all countries. Furthermore, though overall women tend to be more prosocial on average than men, SVO has no mediation effect between gender and tax compliance. We conclude then that although differences in prosociality between men and women seem to be context dependent, differences in tax compliance are indeed much more consistent.

This study deals with a specific volunteering aspect revealed in the German refugee crisis 2015/16. German federalism prescribing interjurisdictional assignments of tasks for designing, financing and implementing services for refugees and their geographic distribution have made municipalities and cities primarily responsible for solving problems of refugees’ accommodation, integration and health care. Based on a survey recently carried out in the district of Erding, it firstly demonstrates distinctive characteristics of the individual volunteers engaged in such related local activities (gender and age; income structure; donation types; working hours), followed by an attempt to measure economic values of volunteering. Despite some methodological weaknesses, this study highlights the monetary significance of volunteers’ hidden contribution to overcoming the crisis and the relatively huge scope of possible savings in local expenditure, compared to an assumed situation if such voluntary activities were fully substituted by those of full-time civil servants.

Pay-what-you-want schemes can be a useful tool to finance high quality and independent news media without restricting readership, therefore guaranteeing maximum diffusion. We conduct a field experiment with the Italian information site lavoce.info to explore how to structure a campaign in a way that maximises readers' willingness to contribute. We compare messages stressing two possible motivations to contribute, namely the public good component of the news or the importance of the individual contributions. We also test the effect of including information about the tax allowance associated with donations. While the particular motivation stressed does not have a significant impact, information about tax allowances surprisingly reduces overall donations, due to a reduction in the number of (small) donors. Stable unsubscriptions from the newsletter suggest that the campaign does not have an adverse effect on readers.

The growing demand for plasma, especially for the manufacture of therapeutic products, creates an urgent need for a careful discussion on the relative merits of different procurement and allocation systems in a way that addresses the increasing demand while abiding by the prevailing moral values in a society. We conducted a randomized survey experiment with a representative sample of 826 Canadian residents to assess attitudes toward legalizing the compensation to plasma donors, a practice that is illegal in several Canadian provinces. We found no evidence of widespread societal opposition to payments to plasma donors, because over 70% of respondents reported that they would support compensation. The support was higher for paying plasma donors in Australia and the United States than in Canada, but the differences were small, suggesting a weak role for “moral NIMBY-ism” or moral relativism in explaining the findings. Moral concerns were the highest-rated reason that respondents gave for being against payment, together with concerns for the safety of plasma supplied by compensated donors, although most of the plasma in Canada does come from compensated American donors. Among those in favor of legalizing compensation for donors (in Canada as well as in Australia), the highest-rated motive was to guarantee a higher domestic supply. Finally, roughly half of those who declared to be against payments reported that they would reconsider their position if the domestic supply and imports were insufficient to meet domestic demand. Most Canadians, therefore, seem to espouse a consequentialist view to issues related to the procurement of plasma.

Allowing for a free choice of the recipient’s gender in a dictator game (N = 508), we find that women show a substantial gender biased towards females. Adding a charity recipient to the possible choices, the charity becomes the primary recipient and overall transfers increase. Yet, conditioning on transfers to fellow students the gender bias of women remains. Moreover, we find that women tend more towards giving half the endowment while men tend more towards “all or nothing.” The literature on cognitive dissonance (the feeling of distress once we act against our internalised values) emphasises the importance of voluntary choice for dissonance effects to take hold. Accordingly, we interpret our results as hinting at an important detail regarding the ongoing debate about gender differences in altruistic giving: primary differences may not be found in the amount of transfers made but rather in the choice of the beneficiary’s gender.

We study the pattern of correlations across a large number of behavioral regularities, with the goal of creating an empirical basis for more comprehensive theories of decision-making. We elicit 21 behaviors using an incentivized survey on a representative sample (n = 1;000) of the U.S. population. Our data show a clear and relatively simple structure underlying the correlations between these measures. Using principal components analysis, we reduce the 21 variables to six components corresponding to clear clusters of high correlations. We examine the relationship between these components, cognitive ability, and demographics, and discuss the theoretical implications of the structure we uncover.

Group compensation and public announcement of performance are two common aspects of working with other people. We randomly assign these aspects to real-effort tasks. Following task completion and payment, subjects are given an unexpected opportunity to donate to a local charity. Group compensation and public announcement of performance have little effect on work performance but striking spillover effects on subsequent donations. Public announcement of performance doubles the amount donated to charity, and group compensation significantly increases the share donating. The results suggest that interpersonal interactions in the workplace environment may have important spillover effects on prosocial behavior outside of work.

The neoclassical model in economics envisages humans as amoral and self-regarding (Econs). This model, also known as the homo-economicus model, is not consistent with the empirical evidence. In light of the evidence, the continued use of the homo-economicus model is baffling. It also stymies progress in the field by putting the burden of adjustment on auxiliary assumptions that need to compensate for an unrealistic picture of human motivation and behavior. This essay briefly outlines the evidence for a more inclusive picture of humans in which ethics and morality play a central role. It argues for replacing the homo-economicus model with a homo-behavioralis model that has already enabled great progress to be made in the field of behavioral economics.

Fundraising interventions may lift donations and/or shift their composition and timing, making it important to study their effect across charity space and time. We find that major fundraising appeals lift total donations, but surprisingly shift donations to other charities across time. To explain this, we develop a two-period model with two sources of warm glow that relates donation responses to underlying preference parameters. A dynamic framework, combined with rich data, provides opportunities to identify substitutability/complementarity in warm glow. The observed pattern is possible only if the two sources of warm glow are substitutes and warm glow is intertemporally substitutable.

Cooperativeness among genetically unrelated humans remains a major puzzle in the social sciences. We explore the causal impact of physical distance on willingness to help. In a field setting, participants decide about supporting local refugees at the dispense of money to themselves. We vary physical distance only, and keep other factors such as cultural distance fixed. The data shows that an increase in local physical distance decreases willingness to donate. A laboratory experiment confirms this finding. We further explore the causal roles of exposure (in the field) and of larger distances (in the lab) with a total of 475 participants.

This paper estimates the tax-price elasticity of giving using UK administrative tax return data, exploiting variation from a large tax reform. We estimate both the intensive and extensive-margin elasticity, using a novel instrumental variables strategy. Then, we derive new conditions to evaluate the welfare consequences of changes in the generosity of the subsidy to donations. We find a small intensive-margin elasticity of -0.2 and a substantial extensive-margin elasticity of -0.8, yielding a total elasticity of about -1. These estimates mask considerable heterogeneity: high-income individuals respond more on the intensive margin, while the extensive-margin response is stronger among low-income taxpayers.

In this paper, we examine and compare the impact of cultural differences on intergenerational altruism in Turkish people living in Turkey and in Germany, using the anthropological concept of worldview. Data were gathered from four surveys: nationwide surveys in Turkey and Germany, an online survey of Turkish people living in Germany, and a survey conducted as an experiment in a mosque attended by Turkish people in Germany. We find striking differences in parenting attitudes between Turkish people living in Turkey and those who live in Germany. Turkish people living in Germany tend to resemble German people in their parenting attitudes. We also find that differences in confidence attached to worldview beliefs, differences in religiosity, and the subjective probabilities attached to worldview beliefs (such as “All humans evolved from another living organism”) between Turkish people living in Turkey and those in Germany have statistically significant explanatory power for these differences in parenting attitudes.

In a family context with endogenous timing, multiple public goods and alternative parental instruments, we show that the optimal timing for the sequential-action game played by rotten kids and a parent depends crucially on whether the kids are homogeneous or heterogeneous. For homogeneous kids, the rotten kid theorem holds irrespective of the parental policy instrument, implying that it is optimal to let the kids to be action leaders. If the kids are heterogeneous, however, parental leadership yields a first best outcome and, hence, it is optimal whenever the kids are economically dependent and agree on the tradeoff between public goods.

We contribute to the literature on private financing of intergenerational public goods, focusing on climate change mitigation. We consider, in a general equilibrium overlapping generations (OLG) model with environmental externalities, a contract between successive generations, whereby agents of the current working-age generation invest a share of their labor income in pollution mitigation in exchange for a transfer to their old-age capital income paid by the next generation. We show that the existence of a contract which is Pareto-improving compared to an equilibrium without contract requires a minimum level of income and we characterize the set of Pareto-improving mitigation-transfer combinations. Nash bargaining yields unique solutions for the mitigation share and transfer rate respectively which increase in income. We prove that Nash bargaining leads to a steady state with lower pollution stock and higher income compared to the steady state without a contract and we study transitional dynamics. Notably, simulation shows that delaying the implementation of a social contract for too long may have considerable welfare costs: Income inevitably falls below the threshold in finite time so that Pareto improving mitigation is no longer possible and the economy converges to a steady state with high pollution stock and low income. In the second part of the paper, we study a game theoretic setup with overlapping generations, taking into account that credibly committing to a contract might not be possible. We show that if transfers are granted as a subsidy to capital income, there exist mitigation transfer schemes which are both Pareto improving and give no generation an incentive to deviate from the contract even in the absence of population growth. Further, the complete crowding out of investment incurred with lump sum transfers is avoided in our setup.

We investigate how income inequality affects social welfare in a model of voluntary contributions to multiple pure public goods. Itaya, de Meza, and Myles (1997) show that the maximization of social welfare precludes income equality in a single pure public good model. In contrast, we show that the result of Itaya et al. may not be valid in a case of multiple voluntarily supplied public goods; specifically, we show that not only an income inequality-raising redistribution policy but also an income-equalizing one may raise social welfare. We also show that if altruistically motivated voluntary transfers are allowed, an inequality-raising redistribution policy is no longer effective and leaves social welfare unchanged.

We report two information cascade game experiments that directly test the impact of altruism on observational learning. Participants interact in two parallel sequences, the observed and the unobserved sequence. Only the actions of the observed entail informational benefits to subsequent participants. We find that observed contradict their private information significantly less often than unobserved when the monetary incentives to herd are moderately weak. Long laboratory cascades accumulate substantial public information which increases the earnings of participants. In Experiment 2, participants have better opportunities to learn about the strategies played by observed which amplifies the impact of altruism on observational learning.

We conduct experimental games with police applicants in Germany to investigate whether intrinsically motivated agents self-select into public service. Our focus is on trustworthiness and the willingness to enforce norms as key dimensions of intrinsic motivation in the police context. We find that police applicants are more trustworthy than non-applicants, i.e., they return higher shares as second-movers in a trust game. Furthermore, they invest more in rewards and punishment when they can enforce cooperation as a third party. Our results provide clear evidence for advantageous self-selection into the German police force, documenting an important mechanism by which the match between jobs and agents in public service can be improved.

Much fundraising is done by individuals within existing social groups. Exploiting a unique dataset, we demonstrate (i) a positive relationship between social group size and the number of donations; (ii) a negative relationship between group size and the size of individual donations; (iii) no clear relationship between group size and the total amount raised. Free riding with respect to the activity being funded cannot explain the relationship between group size and donation size, since the number of social group members is only a subset of total contributors. Instead, the findings are consistent with the notion that giving in social groups is motivated by “relational altruism”.

Extensive research in economics explores generosity in monetary allocations. However, generosity often involves the allocation of non-monetary goods or experiences. Existing evidence suggests that generosity may be higher in such contexts, though no direct comparison exists. Here, we compare generosity in decisions that vary whether allocations are monetary or non-monetary. In two experiments, generosity is significantly higher in non-monetary contexts. Thus, the typical monetary laboratory dictator game may underestimate generosity in many non-laboratory contexts where allocations are non-monetary. We find weaker relationships between individuals’ allocation decisions across monetary and non-monetary contexts than for allocations that hold constant the monetary nature of the context.

The public sector employs a large share of the labor force to execute important functions (e.g. regulation and public good provision) in an environment beset by severe agency problems. Attracting workers who are motivated to serve the public interest is important to mitigate these problems. We investigate whether public and private sector employees differ in terms of their public service motivation, as measured by their propensity to volunteer, using a representative sample of elderly workers from 12 European countries. To overcome potential identification difficulties related to unobservable differences in working conditions (e.g. working time, required effort, job security, career incentives), we also look at retired workers. We find that public sector workers, both those currently employed and those already retired, are significantly more prosocial; however, the difference in prosociality is explained by differences in the composition of the workforce across the two sectors, in terms of (former) workers' education and occupation. Looking across industries and within occupations, we find that former public sector workers in education are more motivated, while there are no differences across the two sectors when considering broad occupational categories. We also investigate other dimensions and find no differences in terms of trust, while there is evidence of some differences in risk aversion, political preferences, life and job satisfaction.

We study charitable giving within social groups. Exploiting a unique dataset, we establish three key relationships between social group size and fundraising outcomes: (i) a positive relationship between group size and the total number of donations; (ii) a negative relationship between group size and the amount given by each donor; (iii) no relationship between group size and the total amount raised by the fundraiser. We rule out classic free-riding to explain these relationships since the number of social group members is only a subset of total contributors. Instead, the findings are consistent with the notion that giving in social groups is motivated by “relational” warm glow.

This paper uses a twin construct to test how the thickness of the veil of ignorance (VOI) affects the perception of fairness and redistributional choices. A fortune reversal is generally perceived to be fair behind a thick VOI, but deemed unfair behind a transparent VOI, particularly if one is currently in a stronger social position. A significant association exists between the perception of fairness and the certainty levels about social position. A 50-50 split is preferred with thicker VOI; whilst the status quo is favoured with thinner VOI. Regardless of the VOI's thickness, few opt for a winnertake-all redistribution.

Contributing to a social cause can be an important driver for workers in the public and non-profit sector as well as in firms that engage in Corporate Philanthropy or other Corporate Social Responsibility policies. This paper compares the effectiveness of social incentives - that take the form of a donation received by a charity of the subject’s choice - to financial incentives. We find that social incentives lead to a 13% rise in productivity, regardless of their form (lump sum or related to performance) or strength. The response is strong for subjects with low initial productivity (30%), while high-productivity subjects do not respond. When subjects can choose the mix of incentives half sacrifice some of their private compensation to increase social compensation, with women more likely than men. Furthermore, offering subjects some discretion in choosing their own payment scheme leads to a substantial improvement in performance. Comparing social incentives to an equally costly increase in private compensation for low productivity subjects reveals that the former are less effective in increasing productivity, but the difference is small and not statistically significant.

Since giving to religious organizations constitutes a substantial portion of total charitable giving, an understanding of the determinants of religious giving is a vital policy concern. Drawing on a novel congregation-level panel dataset, we examine whether religious giving is driven by preferences for racial group affinity, that is, loyalty to one's own racial group. To address endogeneity concerns, we combine a fixed effects estimation framework with an instrumental variable approach. We find robust evidence consistent with the racial group affinity motive: a decrease in the percent of whites in the county is ceteris paribus associated with a decrease in the total giving receipts collected by predominantly white congregations.

This paper explores whether social preferences influence portfolio choices of retail investors. We use administrative investor trading records which we link to decisions of the same investors in experiments with real money at stake. We show that social preferences rather than return expectations or risk perceptions are the main driver of investments in socially responsible (SRI) mutual funds. Social preferences are only associated with investments in SRI funds without tax benefits, but are unrelated to investments in SRI funds with tax incentives. This illustrates that tax incentives change the clientele of mutual funds and that tax incentives crowd out the intrinsic motivations of investors with strong social preferences. Our results also show that prosocial behavior in one domain (experiment) is correlated with prosocial behavior in another domain (investments), which adds to the discussion on the usefulness of experiments in finance.

In this paper we investigate the relationship between earnings and charitable giving. We set up a real effort experiment, in which subjects enter data in four one-hour occasions and are paid a piece rate. From the second occasion onwards, we randomly assign half of the subjects to a treatment with higher piece rates. At the end we ask subjects whether they want to donate a share of their earnings to a charity of their choice. We find that, despite large differences in earnings due to the different piece rates, subjects receiving the higher piece rate are actually less likely to give, and that givers in the two groups give the same share of their total earnings. Charities receive the same average donation from members of the two groups indicating that subjects in this experiment do not treat charitable giving as a normal good.

Decisions to donate time or money for charitable purposes are typically seen as make-or-buy decisions, implying that there should be a clear distinction between individuals engaging in one of these two forms of giving and that this distinction should be somehow linked to opportunity costs. But this is not at all what we observe in micro-level data. We therefore suggest an alternative explanation by which time and cash donations are complements rather than substitutes. Assuming that there is asymmetric information about charities' activities and their effectiveness, doing volunteer work may serve as a screening mechanism enabling donors to better assess the use that is made of the money they could contribute. We formalize this idea and, building on the European Social Survey (ESS), we also provide empirical evidence regarding the co-variation of volunteering and donating money which is suited to support our view.