Equity versus Warm Glow in Intergenerational Giving

Abstract

In different treatments of an intergenerational common resource experiment, monetary payoff maximization by each generation causes either negative or positive externalities for future generations.Two behavioral types have been observed previously in single generation games: equity motivated individuals enjoy giving to the needy and taking from (not giving to) the prosperous, while warm glow altruists enjoy giving unconditionally.In the examined intergenerational game, observed behavior is not consistent with the equity motive.Roughly half of the subjects maximize own monetary payoffs, while the others exhibit altruistic behavior consistent with a model of warm glow giving with constant altruistic sacrifices across treatments.equity capital;altruism;sustainable development;natural resources