Intertemporal Social Preferences

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Abstract: We examine the relationship between time delay and generosity in a laboratory experiment using modified dictator games. In a between-subject design we vary the time of payout for the dictator, the receiver or both. In a within-subject design, we vary the endowment of the dictator as well as the price of giving. We derive and test hypotheses based on a single-self and dual-self model regarding the level of giving as well as the price sensitivity of giving. We find that both models’ hypotheses are largely rejected. There is no difference in discounting for self and other and the average level of giving is independent of time delay. The price sensitivity of giving does change with time delay. When there is no delay giving decreases with increasing price, whereas with any delay giving appears to be price insensitive. When looking for gender differences none are detected with respect to the level of giving. However, the price sensitivity of men and women differs greatly. When there is no delay giving of men decreases with its price whereas giving of women is price insensitive. When time delay is introduced, giving of men becomes price insensitive and giving of women increases with increasing price. Thus, with time delay giving of women shows the property of a Giffen good. We show that choices are largely rationalizable and that the observed differences are not driven by differences in rationalizability of choices or differences in time discounting.

Keywords: generosity, intertemporal choices, rationalizability, social preferences, time discounting