Giving in the Face of Risk

The decision how to share resources with others often needs to be taken under uncertainty on its allocational consequences. Although risk preferences are likely important, existing research is silent about how social and risk preferences interact in such situations. In this paper we provide experimental evidence on this question. In a first experiment givers are not exposed to risk while beneficiaries’ final earnings may be larger or smaller than the allocation itself, depending on the realized state of the world. In a second experiment, risk affects the earnings of givers but not of beneficiaries. We find that individuals’ risk preferences are predictive for giving in both experiments. Increased risk exposure of beneficiaries tends to decrease giving whereas increased risk exposure of givers has no effect. Giving under risk is strongly correlated with giving in the absence of risk. We find limited support for existing models of ex-post and ex-ante fairness. Our results point to the importance of incorporating risk preferences in models of social preferences

The joy of ruling: an experimental investigation on collective giving

We analyse team dictator games with different voting mechanisms in the laboratory. Individuals vote to select a donation for all group members. Standard Bayesian analysis makes the same prediction for all three mechanisms: participants should cast the same vote regardless of the voting mechanism used to determine the common donation level. Our experimental results show that subjects fail to choose the same vote. We show that their behaviour is consistent with a joy of ruling: individuals get an extra utility when they determine the voting outcome

Beliefs about others' intentions determine whether cooperation is the faster choice

Is collaboration the fast choice for humans? Past studies proposed that cooperation is a behavioural default, based on Response Times (RT) findings. Here we contend that the individual’s reckoning of the immediate social environment shapes her predisposition to cooperate and, hence, response latencies. In a social dilemma game, we manipulate the beliefs about the partner’s intentions to cooperate and show that they act as a switch that determines cooperation and defection RTs; when the partner’s intention to cooperate is perceived as high, cooperation choices are speeded up, while defection is slowed down. Importantly, this social context effect holds across varying expected payoffs, indicating that it modulates behaviour regardless of choices’ similarity in monetary terms. Moreover, this pattern is moderated by individual variability in social preferences: Among conditional cooperators, high cooperation beliefs speed up cooperation responses and slow down defection. Among free-riders, defection is always faster and more likely than cooperation, while high cooperation beliefs slow down all decisions. These results shed new light on the conflict of choices account of response latencies, as well as on the intuitive cooperation hypothesis, and can help to correctly interpret and reconcile previous, apparently contradictory results, by considering the role of context in social dilemmas

When Incentives Work too well: Locally Implemented Pay for Performance (P4P) and Adverse Sanctions towards Home Birth in Tanzania - A Qualitative Study.

Despite limited evidence of its effectiveness, performance-based payments (P4P) are seen by leading policymakers as a potential solution to the slow progress in reaching Millennium Development Goal 5: improved maternal health. This paper offers insights into two of the aspects that are lacking in the current literature on P4P, namely what strategies health workers employ to reach set targets, and how the intervention plays out when implemented by local government as part of a national programme that does not receive donor funding. A total of 28 in-depth interviews (IDIs) with 25 individuals were conducted in Mvomero district over a period of 15 months in 2010 and 2011, both before and after P4P payments. Seven facilities, including six dispensaries and one health centre, were covered. Informants included 17 nurses, three clinical officers, two medical attendants, one lab technician and two district health administrators. Health workers reported a number of strategies to increase the number of deliveries at their facility, including health education and cooperation with traditional health providers. The staff at all facilities also reported that they had told the women that they would be sanctioned if they gave birth at home, such as being fined or denied clinical cards and/or vaccinations for their babies. There is a great uncertainty in relation to the potential health impacts of the behavioural changes that have come with P4P, as the reported strategies may increase the numbers, but not necessarily the quality. Contrary to the design of the P4P programme, payments were not based on performance. We argue that this was due in part to a lack of resources within the District Administration, and in part as a result of egalitarian fairness principles. Our results suggest that particular attention should be paid to adverse effects when using external rewards for improved health outcomes, and secondly, that P4P may take on a different form when implemented by local implementers without the assistance of professional P4P specialists