Giving According to GARP: An Experimental Test of the Consistency of Preferences for Altruism
James Andreoni and John H. Miller
Key Words:
Altruism, preferences, revealed preference, giving, dictator game, public goods
Subjects in laboratory experiments often express an interest in behaving unselfishly. While some are tempted to call this behavior irrational, the critical economic question is whether or not subjects' concerns for altruism or fairness can be expressed as a well-behaved preference ordering. Here we explore this question by applying the axioms of revealed preference to the actions of subjects participating in a modified dictator game. We find that over 98 percent of our subjects make choices that are consistent with utility maximization over a well-behaved utility function. While there appears to be heterogeneity among the inferred preferences, we find that three prototypical classes are sufficient to capture our observations. We also use our data to estimate an aggregate demand function for altruism, and show how this function can predict the outcomes from a variety of previous, seemingly unrelated, experiments.