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Generosity and stability of social preferences: the effects of negative socioeconomic shocks and framing

Lotti, Lorenzo (2021): Generosity and stability of social preferences: the effects of negative socioeconomic shocks and framing.

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Abstract

This paper investigates the impact of a negative socioeconomic shock on generosity by analysing the responses of 1255 US citizens to dictator games spread out over eight weeks of the early stages of the COVID-19 pandemic. Each respondent plays four dictator games corresponding to four different recipients: relatives, neighbours, strangers, and the state. Despite the worsening of the pandemic and hence a high cost of donating, individuals perceive increasing marginal benefits of donating and thus become more generous over this timeframe. There is significant heterogeneity in the effects of additional regressors, such as perceived contagion risk, on the likelihood and amount donated to strangers, family members, or the government. At the same time, significant effects of framing bring new evidence regarding the stability of social preferences.

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