Structural modeling of altruistic giving

Breitmoser, Yves (2010): Structural modeling of altruistic giving.

Abstract

The paper analyzes econometric models of altruistic giving in dictator and public goods games. Using existing data sets, I evaluate internal and external validity of "atheoretic" regression models as well as structural models of random behavior, random coefficients, and random utility, controlling for subject heterogeneity by finite mixture modeling. In dictator games, atheoretic regression lacks external validity, while random coefficient models and random utility models offer high degrees of both internal and external validity. In public goods games, regression works comparably well, being bettered only by random utility models. Overall, the ordered GEV model of random utility is most appropriate to describe choices in the considered games.

• Item Type: MPRA Paper
• Language: English
• Keywords: structural modeling; altruism; dictator game; public goods; ordered choice sets
• Subjects: C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C50 - General; C - Mathematical and Quantitative Methods > C4 - Econometric and Statistical Methods: Special Topics > C44 - Operations Research ; Statistical Decision Theory; D - Microeconomics > D6 - Welfare Economics > D64 - Altruism ; Philanthropy; C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C72 - Noncooperative Games

References

Amemiya, T. (1978). On a two-step estimation of a multivariate logit model. Journal of Econometrics, 8(1):13–21.

Anderson, S., Goeree, J., and Holt, C. (1998). A theoretical analysis of altruism and decision error in public goods games. Journal of Public Economics, 70(2):297– 323.

Andreoni, J. (1995a). Cooperation in public-goods experiments: Kindness or confusion? American Economic Review, 85(4):891–904.

Andreoni, J. (1995b). Warm-glow versus cold-prickle: The effects of positive and negative framing on cooperation in experiments. The Quarterly Journal of Economics, 110(1):1–21.

Andreoni, J. and Miller, J. (2002). Giving according to garp: An experimental test of the consistency of preferences for altruism. Econometrica, 70(2):737–753.

Arcidiacono, P. and Jones, J. (2003). Finite mixture distributions, sequential likelihood and the em algorithm. Econometrica, 71(3):933–946.

Bardsley, N. and Moffatt, P. (2007). The experimetrics of public goods: Inferring motivations from contributions. Theory and Decision, 62(2):161–193.

Bruhin, A., Fehr-Duda, H., and Epper, T. (2010). Risk and rationality: Uncovering heterogeneity in probability distortion. Econometrica, 78(4):1375–1412.

Camerer, C. (2003). Behavioral game theory: Experiments in strategic interaction. Princeton, NJ: Princeton University Press.

Cappelen, A., Hole, A., Sørensen, E., and Tungodden, B. (2007). The pluralism of fairness ideals: An experimental approach. American Economic Review, 97(3):818–827.

Cappelen, A., Sørensen, E., and Tungodden, B. (2010). Responsibility for what? Fairness and individual responsibility. European Economic Review, 54(3):429–441.

Choi, S., Gale, D., and Kariv, S. (2008). Sequential equilibrium in monotone games: A theory-based analysis of experimental data. Journal of Economic Theory, 143(1):302–330.

Conte, A., Hey, J., and Moffatt, P. (2008). Mixture models of choice under risk. Journal of Econometrics (forthcoming).

Conte, A. and Moffatt, P. (2009). The pluralism of fairness ideals: a comment. Working paper.

Cox, J., Friedman, D., and Gjerstad, S. (2007). A tractable model of reciprocity and fairness. Games and Economic Behavior, 59(1):17–45.

Fischbacher, U., Gächter, S., and Fehr, E. (2001). Are people conditionally cooperative? evidence from a public goods experiment. Economics Letters, 71(3):397–404.

Fisman, R., Kariv, S., and Markovits, D. (2007). Individual preferences for giving. The American Economic Review, 97(5):1858–1876.

Forsythe, R., Horowitz, J., Savin, N., and Sefton, M. (1994). Fairness in simple bargaining experiments. Games and Economic Behavior, 6(3):347–369.

Goeree, J., Holt, C., and Laury, S. (2002). Private costs and public benefits: unraveling the effects of altruism and noisy behavior. Journal of Public Economics, 83(2):255–276.

Haile, P., Hortacsu, A., and Kosenok, G. (2008). On the empirical content of quantal response equilibrium. American Economic Review, 98(1):180–200.

Harrison, G. and Rutström, E. (2009). Expected utility theory and prospect theory: One wedding and a decent funeral. Experimental Economics, 12(2):133–158.

Hoffman, E., McCabe, K., Shachat, K., and Smith, V. (1994). Preferences, property rights, and anonymity in bargaining games. Games and Economic Behavior, 7(3):346–380.

Keane, M. P. (2010). Structural vs. atheoretic approaches to econometrics. Journal of Econometrics, 156(1):3–20.

Keser, C. and van Winden, F. (2000). Conditional cooperation and voluntary contributions to public goods. Scandinavian Journal of Economics, 102(1):23–39.

Levine, D. (1998). Modeling altruism and spitefulness in experiments. Review of Economic Dynamics, 1(3):593–622.

McFadden, D. (1978). Modelling the choice of residential location. In Karlqvist, A., Lundqvist, L., Snickars, F., and Weibull, J., editors, Spatial interaction theory and planning models, pages 75–96. North Holland, Amsterdam.

McFadden, D. (1981). Econometric models of probabilistic choice. In Manski, C. and McFadden, D., editors, Structural analysis of discrete data with econometric applications, pages 198–274. MIT Press, Cambridge.

McFadden, D. (1984). Econometric analysis of qualitative response models. Handbook of econometrics, 2:1395–1457.

McKelvey, R. and Palfrey, T. (1995). Quantal response equilibria for normal form games. Games and Economic Behavior, 10(1):6–38.

Myatt, D. and Wallace, C. (2008). An evolutionary analysis of the volunteer’s dilemma. Games and Economic Behavior, 62(1):67–76.

Offerman, T., Schram, A., and Sonnemans, J. (1998). Quantal response models in step-level public good games. European Journal of Political Economy, 14(1):89–100.

Peel, D. and MacLahlan, G. (2000). Finite Mixture Models. Wiley interscience.

Rabin, M. (1993). Incorporating fairness into game theory and economics. American Economic Review, 83(5):1281–1302.

Rosenthal, R. (1989). A bounded-rationality approach to the study of noncooperative games. International Journal of Game Theory, 18(3):273–292.

Rust, J. (2010). Comments on: "structural vs. atheoretic approaches to econometrics" by Michael Keane. Journal of Econometrics, 156(1):21–24.

Schwarz, G. (1978). Estimating the dimension of a model. Annals of Statistics, 6(2):461–464.

Small, K. (1987). A discrete choice model for ordered alternatives. Econometrica, 55(2):409–424.

Small, K. (1994). Approximate generalized extreme value models of discrete choice. Journal of Econometrics, 62(2):351–382.

Stahl, D. and Wilson, P. (1995). On players’ models of other players: Theory and experimental evidence. Games and Economic Behavior, 10(1):218–254.

Tversky, A. (1972). Elimination by aspects: A theory of choice. Psychological Review, 79(4):281–299.

Vovsha, P. (1997). Application of cross-nested logit model to mode choice in Tel Aviv, Israel, metropolitan area. Transportation Research Record, 1607(-1):6–15.

Willinger, M. and Ziegelmeyer, A. (2001). Strength of the social dilemma in a public goods experiment: An exploration of the error hypothesis. Experimental Economics, 4(2):131–144.

Yi, K. (2003). A quantal response equilibrium model of order-statistic games. Journal of Economic Behavior and Organization, 51(3):413–425.