If the Worst Comes to the Worst. Dictator Giving When Recipient's Endowments are Risky

Donors may often not be sure whether a recipient really deserves their help. Does this uncertainty deter generosity? In an experiment we find that, to the contrary, under most specifications of uncertainty, dictators give more, compared with the donation the same dictator makes to a recipient they know to have the expected value of the endowment with certainty. They are particularly concerned about the possibility that a recipient leaves the lab with no payoff from the game

Self-serving interpretations of ambiguity in other-regarding behavior

We demonstrate that people can adopt a favorable view of ambiguous risks relative to ones with known probabilities, contrary to the usual attitude of ambiguity aversion, when doing so permits justification for unfair behavior. We use binary dictator games involving a choice between a relatively equitable allocation and an "unfair" allocation that is both less generous and makes the recipient's payment dependent on a p=0.5 lottery. Dictators choose the unfair option more frequently when the recipient's allocation depends on an ambiguous lottery than on a lottery with a known probability -- even though the objective distributions of outcomes are identical under the two kinds of lotteries. Dictators' estimates of the expected value of the recipients' allocations are inflated under ambiguity, indicating that dictators form self-serving beliefs about ambiguity. Finally, increased unfair behavior under ambiguity is extinguished when dictators are constrained by their own initial unmotivated, and negative, attitudes towards ambiguity.Ambiguity Social preference Fairness Dictator game Altruism

Favorable Interpretations of Ambiguity and Unstable Preferences for Fairness

We show that people manipulate their valuations of ambiguous risks when doing so allows them to justify unfair behavior. In a binary dictator decision, dictators chose between a “fair” and an “unfair” choice. By choosing the unfair choice, dictators increase their own allocation, decrease the allocation to the recipient, and make the recipient’s allocation dependent on a p=0.5 lottery. More unfair allocations were made when the lottery was ambiguous than when it involved simple risk. We posit a mechanism through which dictators reconcile self-interest with a desire to act fairly in the presence of ambiguity. We predict and find that dictators adopt a favorably-biased view of ambiguity, as evidenced by higher estimates of the expected value of ambiguous lotteries relative to comparable lotteries involving simple risk. Dictators adopt this biased perception of ambiguity despite monetary incentives for accuracy. However, this motivated favorable view of ambiguity and increased unfair behavior is extinguished when dictators are constrained by their own initial unmotivated (negative) attitudes towards ambiguity. These findings suggest that perceptions of ambiguity can be manipulated by an underlying desire to behave self-interestedly at the expense of another, and run counter to the usual finding that ambiguity is perceived as unfavorable (ambiguity aversion)

Self-Serving Interpretations of Ambiguity in Other-Regarding Behavior

We demonstrate that people can adopt a favorable view of ambiguous risks – contrary to the usual attitude of ambiguity aversion – when doing so permits justification for unfair behavior. We use simple binary dictator games in which one participant in a pair chooses between two allocation options for herself and an anonymous recipient. The “fair” option gives both participants relatively equal allocations, while the “unfair” option gives more to the dictator, less to the recipient, and also makes the recipient’s allocation dependent on a p=0.5 lottery. Dictators choose the unfair option more frequently when the recipient’s allocation depends on an ambiguous lottery than on a lottery with a known probability – even though the objective distributions of outcomes are identical under the two kinds of lotteries. Further, dictators’ estimates of the expected value of the recipients’ allocations are inflated under ambiguity, indicating that dictators form self-serving beliefs about ambiguity. Finally, increased unfair behavior under ambiguity is extinguished when dictators are constrained by their own initial unmotivated, and negative, attitudes towards ambiguity