Altruism or diminishing marginal utility?

Gauriot, Romain, Heger, Stephanie and Slonim, Robert (2020) Altruism or diminishing marginal utility? Journal of Economic Behavior and Organization, 180. pp. 24-48. ISSN 0167-2681

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We challenge a commonly used assumption in the literature on social preferences and show that this assumption leads to significantly biased estimates of the social preference parameter. Using Monte Carlo simulations, we demonstrate that the literature’s common restrictions on the curvature of the decision-makers utility function can dramatically bias the altruism parameter. We show that this is particularly problematic when comparing altruism between groups with well-documented differences in risk aversion or diminishing marginal utility, i.e., men versus women, giving motivated by pure versus warm glow motives, and wealthy versus poor. We conclude by proposing two approaches to address this bias.

Item Type: Article
Uncontrolled Keywords: altruism,biased inferences,marginal utility,economics and econometrics,organizational behavior and human resource management ,/dk/atira/pure/subjectarea/asjc/2000/2002
Faculty \ School: Faculty of Social Sciences > School of Economics
UEA Research Groups: Faculty of Social Sciences > Research Groups > Behavioural Economics
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Depositing User: LivePure Connector
Date Deposited: 27 Oct 2020 01:07
Last Modified: 22 Oct 2022 07:21
DOI: 10.1016/j.jebo.2020.09.030

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