Title

It's Not Just the Thought That Counts: an experimental study on hidden cost of giving

Document Type

Article

Keywords

Gift exchange; Intention; Reciprocity; Efficiency; Externalities; Social preferences

Identifier Data

10.1016/j.jpubeco.2016.04.005

Publisher

ScienceDirect

Publication Source

Journal of Public Economics, 138, 22-31

Rights Management

CC NC ND

Abstract

Receiving a gift can create an impulse to reciprocate, even when doing so may be inefficient and potentially harmful to a third party. This paper provides a theoretical framework for a pure gift effect on reciprocity impulses and experimental evidence that such an effect exists: that is, a gift receiver will favor an actual gift giver over an intended gift giver, even if the intended gift giver incurred the same costs and signaled the same intention to give. This result contrasts with the predictions of existing theories on social preferences. We also show that the pure gift effect is present even when it leads to a less efficient outcome, or when the gift is given without the expectation of future returns. Our findings suggest that when reciprocating a gift becomes socially inefficient, it may be more advantageous to guard against gift receiving or to keep donations “secret” than to try to control the intent to give.

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