Author
James Andreoni
Other affiliations: University of California, Berkeley, University of Texas at Dallas, University of California, Los Angeles ...read more
Bio: James Andreoni is an academic researcher from University of California, San Diego. The author has contributed to research in topics: Public good & Crowding out. The author has an hindex of 58, co-authored 180 publications receiving 26404 citations. Previous affiliations of James Andreoni include University of California, Berkeley & University of Texas at Dallas.
Papers published on a yearly basis
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TL;DR: In this paper, the invariance proposition of public goods and the optimal tax treatment of charitable giving are discussed. And the authors show that impure altruism is more consistent with observed patterns of giving than the conventional pure altruism approach, and has policy implications that may differ widely from those of the conventional models.
Abstract: When people make donations to privately provided public goods, such as charity, there may be many factors influencing their decision other than altruism. Social pressure, guilt, sympathy, or simply a desire for a "warm glow" may all be important. This paper considers such impure altruism formally and develops a wide set of implications. In particular, this paper discusses the invariance proposition of public goods, solves for the sufficient conditions for neutrality to hold, examines the optimal tax treatment of charitable giving, and calibrates the model based on econometric studies in order to consider policy experiments. Impure altruism is shown to be more consistent with observed patterns of giving than the conventional pure altruism approach, and to have policy implications that may differ widely from those of the conventional models. Copyright 1990 by Royal Economic Society.
5,139 citations
TL;DR: The authors formally developed a model of giving in which altruism is not "pure." In particular, people are assumed to get a "warm glow" from giving, and this model generates identifiable comparative statics results that show that crowding out of charity is incomplete and that government debt will have Keynesian effects.
Abstract: Models of giving have often been based on altruism. Examples include charity and intergenerational transfers. The literatures on both subjects have centered around neutrality hypotheses: charity is subject to complete crowding out, while intergenerational transfers are subject to Ricardian equivalence. This paper formally develops a model of giving in which altruism is not "pure." In particular, people are assumed to get a "warm glow" from giving. Contrary to the previous literature, this model generates identifiable comparative statics results that show that crowding out of charity is incomplete and that government debt will have Keynesian effects.
3,028 citations
TL;DR: In this article, the authors apply the axioms of revealed preference to the altruistic actions of subjects and find that over 98% of the subjects made choices that are consistent with utility maximization.
Abstract: Subjects in economic laboratory experiments have clearly expressed an interest in behaving unselfishly. They cooperate in prisoners’ dilemma games, they give to public goods, and they leave money on the table when bargaining. While some are tempted to call this behavior irrational, economists should ask if this unselfish and altruistic behavior is indeed self-interested. That is, can subjects’ concerns for altruism or fairness be expressed in the economists’ language of a well-behaved preference ordering? If so, then behavior is consistent and meets our definition of rationality. This paper explores this question by applying the axioms of revealed preference to the altruistic actions of subjects. If subjects adhere to these axioms, such as GARP, then we can infer that a continuous, convex, and monotonic utility function could have generated their choices. This means that an economic model is sufficient to understand the data and that, in fact, altruism is rational. We do this by offering subjects several opportunities to share a surplus with another anonymous subject. However, the costs of sharing and the surplus available vary across decisions. This price and income variation creates budgets for altruistic activity that allow us to test for an underlying preference ordering. We found that subjects exhibit a significant degree of rationally altruistic behavior. Over 98% of our subjects made choices that are consistent with utility maximization. Only a quarter of subjects are selfish money-maximizers, and the rest show varying degrees of altruism. Perhaps most strikingly, almost half of the subjects exhibited behavior that is exactly consistent with one of three standard CES utility functions: perfectly selfish, perfect substitutes, or Leontief. Those with Leontief preferences are always dividing the surplus equally, while those with perfect substitutes preferences give everything away when the price of giving is less than one, but keep everything when the price of giving is greater than one. Using the data on choices, we estimated a population of utility functions and applied these to predict the results of other studies. We found that our results could successfully characterize the outcomes of other studies, indicating still further that altruism can be captured in an economic model.
1,742 citations
TL;DR: In this paper, two prevailing hypotheses for why free riding is seldom observed with single-shot games are discussed. And an experiment is presented that examines both hypotheses and concludes that strategies and learning are the main reasons for free riding.
1,205 citations
TL;DR: For example, this article found that when altruism is expensive, women are kinder, but when it is cheap, men are more altruistic, whereas women tend to be "equalitarians" who prefer to share evenly.
Abstract: We study gender differences in altruism by examining a modieed dictator game with varying incomes and prices. Our results indicate that the question “which is the fair sex?” has a complicated answer—when altruism is expensive, women are kinder, but when it is cheap, men are more altruistic. That is, we end that the male and female “demand curves for altruism” cross, and that men are more responsive to price changes. Furthermore, men are more likely to be either perfectly selesh or perfectly seleess, whereas women tend to be “equalitarians” who prefer to share evenly.
1,149 citations
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TL;DR: This paper showed that if some people care about equity, the puzzles can be resolved and that the economic environment determines whether the fair types or the selesh types dominate equilibrium behavior in cooperative games.
Abstract: There is strong evidence that people exploit their bargaining power in competitivemarkets butnot inbilateral bargainingsituations. Thereisalsostrong evidence that people exploit free-riding opportunities in voluntary cooperation games. Yet, when they are given the opportunity to punish free riders, stable cooperation is maintained, although punishment is costly for those who punish. This paper asks whether there is a simple common principle that can explain this puzzling evidence. We show that if some people care about equity the puzzles can be resolved. It turns out that the economic environment determines whether the fair types or the selesh types dominate equilibrium behavior.
8,783 citations
TL;DR: This article showed that if a fraction of the people exhibit inequality aversion, stable cooperation is maintained although punishment is costly for those who punish, and they also showed that when they are given the opportunity to punish free riders, stable cooperations are maintained.
Abstract: There is strong evidence that people exploit their bargaining power in competitive markets but not in bilateral bargaining situations. There is also strong evidence that people exploit free-riding opportunities in voluntary cooperation games. Yet, when they are given the opportunity to punish free riders, stable cooperation is maintained although punishment is costly for those who punish. This paper asks whether there is a simple common principle that can explain this puzzling evidence. We show that if a fraction of the people exhibits inequality aversion the puzzles can be resolved.
6,919 citations
TL;DR: The authors demonstrate that people are motivated by both their pecuniary payoff and their relative payoff standing, and demonstrate that a simple model, constructed on the premise that people were motivated by either their payoff or their relative standing, organizes a large and seemingly disparate set of laboratory observations as one consistent pattern, which explains observations from games where equity is thought to be a factor, such as ultimatum and dictator, games where reciprocity is played a role and games where competitive behavior is observed.
Abstract: We demonstrate that a simple model, constructed on the premise that people are motivated by both their pecuniary payoff and their relative payoff standing, organizes a large and seemingly disparate set of laboratory observations as one consistent pattern The model is incomplete information but nevertheless posed entirely in terms of directly observable variables The model explains observations from games where equity is thought to be a factor, such as ultimatum and dictator, games where reciprocity is thought to play a role, such as the prisoner's dilemma and gift exchange, and games where competitive behavior is observed, such as Bertrand markets (JEL C78, C90, D63, D64, H41)
5,391 citations
TL;DR: In this paper, the invariance proposition of public goods and the optimal tax treatment of charitable giving are discussed. And the authors show that impure altruism is more consistent with observed patterns of giving than the conventional pure altruism approach, and has policy implications that may differ widely from those of the conventional models.
Abstract: When people make donations to privately provided public goods, such as charity, there may be many factors influencing their decision other than altruism. Social pressure, guilt, sympathy, or simply a desire for a "warm glow" may all be important. This paper considers such impure altruism formally and develops a wide set of implications. In particular, this paper discusses the invariance proposition of public goods, solves for the sufficient conditions for neutrality to hold, examines the optimal tax treatment of charitable giving, and calibrates the model based on econometric studies in order to consider policy experiments. Impure altruism is shown to be more consistent with observed patterns of giving than the conventional pure altruism approach, and to have policy implications that may differ widely from those of the conventional models. Copyright 1990 by Royal Economic Society.
5,139 citations
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TL;DR: In this article, it is shown that every mutual-max or mutual-min Nash equilibrium is a fairness equilibrium, and that if payoffs are small, fairness equilibria are roughly the set of mutualmax and mutualmin outcomes; if payoff are large, fairness equilibrium are roughly a set of Nash equilibra.
Abstract: People like to help those who are helping them and to hurt those who are hurting them. Outcomes rejecting such motivations are called fairness equilibria. Outcomes are mutual-max when each person maximizes the other's material payoffs, and mutual-min when each person minimizes the other's payoffs. It is shown that every mutual-max or mutual-min Nash equilibrium is a fairness equilibrium. If payoffs are small, fairness equilibria are roughly the set of mutual-max and mutual-min outcomes; if payoffs are large, fairness equilibria are roughly the set of Nash equilibria. Several economic examples are considered and possible welfare implications of fairness are explored. Copyright 1993 by American Economic Association.
4,981 citations