Generosity toward others and particularly sharing with those less fortunate are central themes across human societies and religions worldwide. Over 30 years of experimental research have shown that people are quite generous, both in lab settings and field environments, even towards those they are not directly related to.
The Dictator Game (DG) is a standard tool for measuring generosity. In this two-player game, one player, the dictator, decides how to split a sum of money with a second, unknown and anonymous participant, who can only accept the division. Typically, dictators give away about 30% of the money, with instances where they donate the entire amount not being uncommon when the recipient is a charity.
However, the stakes in these experiments have typically been low. Real-life situations often involve substantial sums of money, and these high-stake conditions could influence the generosity of participants. Understanding this relationship between stake size and altruistic behaviour is crucial for framing policies and designing fundraising campaigns.
In a recent study, researchers explored how different stake levels—small (5€), medium (100€), and large (1,000€)—affect charitable donations. The findings highlight that while the absolute amount donated increases with higher stakes, the proportion of money given away decreases. This novel insight is pivotal for creating more effective social policies and charity strategies.
The study employed the DG with lottery prize donations to charity under conditions of ambiguity, where participants committed to donating a portion of their prize without knowing the probability of winning. This mirrors real-life situations where donors are unsure about various outcomes but still make charitable contributions.
Participants were divided into three groups, each assigned to one of the three stake levels. The results showed that people donated 2.40€ out of 5€, 26.19€ out of 100€, and 219.88€ out of 1,000€. Absolute donations rose significantly with stakes, yet the fraction of the total sum given decreased from 48% at the lowest stake, to 26% at the medium stake, and 22% at the highest stake. This indicates a clear trend where generosity in relative terms diminishes as the stakes grow larger.
This outcome challenges the perception of humans as hyper-altruistic beings. While substantial donations across all stake levels reflect a fundamental aspect of human nature to share, the sensitivity of generosity to the size of the stakes points to a more complex interaction driven by the perceived value of money and situational factors.
Under low stakes, participants tend to exhibit hyper-altruistic behaviors, often donating the entire amount available. However, as the stakes increase, the percentage of hyper-altruistic individuals drastically decreases, suggesting such behaviour may be a byproduct of the relatively low stakes in experimental settings.
The study further reveals interesting patterns concerning fair division and completely selfish behaviour. Around 10% of participants consistently shared the prize equally across all stake levels, hinting at a stable fair share behaviour. Conversely, the fraction of individuals donating zero was lowest at the smallest and largest stake levels but peaked at the medium stake, indicating a non-linear relationship between stake size and selfishness.
To dive deeper into these dynamics, the researchers analyzed how different demographic factors, such as age and gender, influenced donation behaviors. It was found that women and men donated similarly across all treatments, showing no significant gender differences in response to varying stakes.
From a methodological standpoint, the researchers applied ordinary least squares (OLS) regression and other statistical models to validate their findings. These rigorous tests confirmed that as stakes rise, the absolute amount donated increases, but the proportion of the prize given away decreases consistently.
Considering the real-world applications, these results are crucial for policymakers and fundraisers. Fundraising campaigns, for instance, might achieve higher returns by offering multiple smaller prizes rather than one large prize. Public policies fostering prosocial behaviours, like mask-wearing or environmental conservation efforts that appeal to individuals’ social concerns, must account for how people’s generosity diminishes with higher personal costs.
The study's findings underscore the need for future research to delve into the underlying causes behind the observed reduction in relative generosity as stakes increase. Furthermore, there is a call for experimental designs that mimic real-world conditions more closely to better understand the broader implications of these behaviors.
Future studies could explore how different forms of ambiguity, beyond symmetric ambiguity, influence altruistic behavior. Additionally, there is a scope to investigate whether prolonged exposure to high-stake environments alters generosity patterns over time. These avenues could provide deeper insights into human prosocial behavior and the factors driving it.
In conclusion, while human generosity is a prevalent trait, its expression is heavily influenced by the stakes involved. High-stake conditions tend to suppress relative altruism, highlighting a nuanced interplay between financial value and prosocial motivations. Understanding this relationship can help refine how we approach social policies, fundraising strategies, and the broader application of behavioral economics.
