Guilt, Shame, and Prosociality

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Guilt, Shame, and Prosociality
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Wanted Positive Theories of Giving

• Question Why do people give?
• Some answers
• Out of compassion
• Out of obligation
• To avoid guilt
• To avoid shame
• Objective Shed light on the roles of guilt and
  shame.

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Vehicle Dictator Games

• Basic Dictator Game experiment
• Two subjects. One subject, the Dictator, gets a
  monetary endowment M from the experimenter, the
  other subject, the Recipient, gets nothing. The
  Dictator decides how to allocate the endowment
  between herself and the recipient.

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Clarification

• Strictly speaking, economic experiments with
  monetary payoffs are not games but game
  forms. Only when the (von Neumann-Morgenstern)
  utility function has been defined, can we
  identify the game theoretic solution.
• The identification of such utility functions is
  what concerns me here.

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Dictator Games Different treatments

• FF Face-to-face
• Natural, but what is the situation?
• SB Single-blind (separate rooms)
• Typical treatment, fixates the situation
• DB Double-blind (anonymous choice)
• Reduces experimenter concerns
• TB Triple-blind (recipient unawareness)
• Reduces effect of joint context

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A SEK 120 Dictator Game (DB)Ellingsen and
Johannesson (EHB2008)
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Dictator Games General features

• The SEK 120 game distributed 6 SEK 20 bills. With
  finer grids, the following pattern is typical
• Peaks at 0 and even splits
• Troughs after 0 and before the even split.
• Few donations above the even split.

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Proximate Explanations

• Let us look for utility functions U that may
  rationalize the choices that we observe.
• Initially, we consider utility functions that
  depend merely on the material outcomes.
• As a convention
• sub-utility functions f are increasing,
• parameters are non-negative.
• Of course, people are heterogeneous.

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What model would fit? (i)

• Could it be simply altruism? Let
• Uif1(ci)aif2(cj),
• where ci is is consumption.
• Probably not, because
• It is unreasonable that the utility maximization
  problem would have an interior solution given the
  restriction on transfers.
• Indeed, subjects should give nothing, because
  people dont share their money with random
  strangers outside the lab.
• Interior final allocations are sensitive to
  initial allocations (taking options). Bardsley
  (EE, 2008) and List (JPE, 2007).

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What model would fit? (ii)

• Could it be altruism and narrow bracketing? Let
• Uif1(si)aif2(sj),
• where si is is endowment share.
• Probably not.
• Narrow bracketing surely plays a role. The
  situation is how to share manna from heaven.
• But only a strange distribution of a (in
  combination with strange functions f1 and f2) can
  rationalize the data.

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What model would fit? (iii)

• Assume narrow bracketing from now on. Could it be
  fairness? Let
• Uif1(si)-fif2(s-sj),
• where si is is share.
• Explains why few give more than half.
• Can also explain Bardsley (EE, 2008) and List
  (JPE, 2007).
• But why give exactly 0.5? If s0.5, wed expect
  sjlt0.5 is f2 is smooth. (More on this later.)
• And what about the troughs just above 0 and just
  below 0.5? (More on this later.)

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Counterevidence (i)

• Anonymity evidence challenges the fairness theory
  but is sparse/weak
• Hoffman et al (AER, 1996) find that double-blind
  design reduces contributions somewhat (although
  not statistically sig. n40/treatment) an
  experimenter audience effect?
• Koch and Norman (SEJ, 2008) likewise find that
  triple-blind design reduces contributions further
  (again, not stat. sig. n36/treatment) a
  recipient audience effect?

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Counterevidence (ii) Exit

• Exit evidence Dana et al. (OBHDP, 2006).
• 10 Dicator Game,
• Unexpected 9 exit option (exit implies
  receiver unawareness about game).
• Case 1 Standard. Receiver aware unless exit.
• Case 2 Private. Receiver always unaware.
• Models considered above predict No exit.
• Standard game 33 exit. (n61)
• Private game 4 exit. (n24)

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Another nail in the coffin

• Broberg, Ellingsen and Johannesson (EL, 2007) go
  further and elicit exit reservation prices.
• 119 subjects. Double-blind. Letters format.
  BDM-elicitation

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Observations

• 64 of subjects violate purely outcome-based
  preferences (exit res. price lt 100).
• Relationship between donation and exit
  reservation price is negative. If motivated
  solely by altruism or fairness the relationship
  should be positive.

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How can we explain exits?

• Exit evidence suggests that we must somehow
  incorporate beliefs into the utility function.
• Two approaches
• Caring about the recipients expectations (ex
  ante beliefs about action).
• Caring about the recipients judgment (ex post
  beliefs about type).
• Dana et al. formally discuss expectations, but
  informally also discusses judgment.

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Expectations Guilt aversion

• For example, let
• Uif1(si)-?f2(sE-sj),
• where sE is the share i thinks that j expects.
• Literature Geanakoplos, Pearce, Stacchetti (GEB,
  1989), Charness and Dufwenberg (Ema, 2006), and
  Battigalli and Dufwenberg (JET,forthcoming).
• Note If the reason for guilt is concern for
  recipients disappointment, this is an
  other-regarding preference (let-down aversion).

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Evidence for guilt aversion

• Dictator donations correlate positively with
  reported sE.
• Dufwenberg and Gneezy (GEB, 2000)
• Back-transfers in trust games are positively
  correlated with reported sE.
• Charness and Dufwenberg (Ema, 2006)
• Bacharach, Guerra, Zizzo, (TD, 2007)
• Alternative interpretation (False) consensus
  effect.

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Guilt aversion or false consensus?

• Ellingsen et al (2008) elicit recipient beliefs
  and communicate them to dictators.
• 84 pairs.
• The figure shows a bubble-plot of the
  relationship between the recipients belief and
  the dictators donation.

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Judgment Shame and pride(social esteem)

• Nature, when she formed man for society,
  endowed him with an original desire to please,
  and an original aversion to offend his brethren.
  She taught him to feel pleasure in their
  favourable, and pain in their unfavourable
  regard. She rendered their approbation most
  flattering and most agreeable to him for its own
  sake and their disapprobation most mortifying
  and most offensive.
• Adam Smith (1790, Pt III, Sec I, Para 13)

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A social esteem model

• For example, let
• Uif1(si)-fif2(s-sj)f3(fB),
• where fB is is belief about js belief about
  fi see Andreoni and Bernheim (wp,2008).
• Related literature
• Glazer and Konrad (AER, 1996), Prendergast and
  Stole (EER, 2001), Bénabou and Tirole (AER,
  2006), Ellingsen and Johannesson (2007 AER,
  2008), Tadelis (2008).
• Assume continuous distribution of fi.
• Compute perfect Bayesian equilibria and apply D1,
  a signaling game refinement.

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Model predictions

• The model can explain
• Absence of sigt0.5 (as before yet not trivial)
• Prevalence of si0.5 (new)
• Troughs just above 0 and just below 0.5 (new)
• Anonymity evidence (new)
• Exit evidence (new)
• i.e., all puzzles so far!
• And it has additional implications.

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Additional evidence

• A USD 20 non-anonymous Dictator Game.
• Suppose that with probability p the donation is x
  (small) regardless of dictators choice this in
  known to both.
• Pure fairness ? larger donations.
• Social esteem concern ? donate x.
• Two conditions (x0, x1). Each dictator sees
  one, and makes choices for p0, p1/4, p1/2,
  p3/4. (n30/treatment and role).

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Obscured choices
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Caveat

• Richer psychological model may sometimes be
  required
• Cues matter
• Haley and Fessler (EHB, 2005)
• Communication matters
• Prior argumentation Mohlin and Johannesson
  (JEBO, 2008).
• Anticipated feedback Ellingsen and Johannesson
  (EHB, 2008).
• People shield themselves from information
• Dana, Weber, Kuang (ET, 2007).

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Fairness is conditional

• Dictator role allocation procedure matters.
• E.g., Hoffman et al (GEB, 1994)
• Prior recipient behavior matters.
• E.g., Falk and Kosfeld (AER, 2006).
• Thus, both f and f3(f) could depend on these
  factors.

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Cues

• Cues that one is being watched induce larger
  donations
• Haley and Fessler (EHB, 2005)
• Bateson and Roberts (BL, 2006)
• Burnham (HN, 2007)
• Cues of norms matter
• Framing (labels, language) matters. E.g., Hoffman
  et al (AER, 1996)
• Guessing, watching Krupka and Weber (wp, 2007)
• Facing opponent guesses Ellingsen et al (wp,
  2008)

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Dual Process

• Loewenstein and Small (RGP, 2007) suggest that
  social behavior is driven by interplay of
  instincts and cognition.
• Neuroscientific evidence
• Personal moral dilemmas (trolley problems)
  activate other brain regions than impersonal
  dilemmas Greene et al (Science, 2001)
• Lesions to VMPFC (social emotions center)
  induce utilitarian decisions Koenigs et al
  (Nature, 2007).

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Dual process and giving

• Little work, but pilots suggest that cognitive
  load releases selfish instincts in DG.
• In a (mini-) Dictator Game, dictators become more
  selfish when outcome for recipient is uncertain
  (and refuse to learn the outcome)
• Dana, Weber, Kuang (ET, 2007)
• Alt B 5,5 Alt A 6,1 Alt A 6,5

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Moral arguments

• When recipient can make moral arguments in
  writing before dictator decides, donations go up
  by 70 Mohlin and Johannesson (JEBO, 2008).
• When recipient can send a written message after
  the donation, donations go up by 40 Ellingsen
  and Johannesson (EHB, 2008).

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Feedback ExperimentEllingsen/Johannesson,
Evolution and Human Behavior 2008