Warm-Glow Giving : Earned Money and the Option to Take

Giving (warm-glow plus purely altruistic giving) in the dictator game has been shown to vary with the nature of the endowment (house versus earned money), the action set (giving only versus the option to take), and the type of recipient (anonymous participants versus a charity). The contribution of this paper is that it is the first to test if these three factors similarly affect warm-glow giving alone. There is no reason that one would expect the same outcomes given that the motivations for warm-glow giving are different from the motivations for purely altruistic giving. Using the Crumpler and Grossman (2008) design for testing for warm-glow giving, we examine the relative effect of earned versus house money endowments on warm-glow giving with two decision frames: one in which participants can only give to charity, and a second with a symmetric decision space in which participants can either give to or take from a charity. Finally, we conduct additional sessions in which participants are paired with other participants rather than with a charity. We find that giving to charity not only persists but actually increases when the endowment is earned, but giving to another participant decreases with earned endowments. The option to take does reduce warm-glow giving to charity, but significant giving remains