Toward Cooperative Altruism: Essays on the Foundations of Altruistic Economics

Abstract

Cooperative altruism is the motivation or action of working with others to improve the welfare of another sentient being. This dissertation is based on the exploration of three foundations of cooperative altruism: riskless altruism, attitudes toward risk, and altruism under risk. Each of its main chapters reports new empirical results about one or more of these foundations. Data were collected in a laboratory experiment, in which each participant was paired with someone in Metro-Detroit, who was raising money to meet a basic need. Each participant completed a suite of decision-making tasks. In one set of tasks, participants decided whether or not to give a specific amount of money to their beneficiary. These tasks differed according to whether and how risk affected the impact of their gift. In the other two tasks, participants decided between a risky and certain option for their self to reveal their self-regarding risk attitude and between a risky and certain option for their beneficiary to reveal their other-regarding risky attitude. The subject of the first study is giving behavior when the impact of a participant's gift is certain. It is shown that most benefactors are on one of Two Roads to Altruism, which differ according to the benefactor's reason for giving. Those on the Rho Road gave because the marginal value of a dollar donated to the beneficiary was greater than the marginal value of a dollar kept by their self. Those on the Alpha Road gave because they cared more about improving their beneficiary's welfare than increasing their satisfaction from keeping more money. The second study explores the fundamental issue of utility invariance. It answers the question: Are the properties of self-regarding utility and/or other-regarding utility invariant across the contexts of risk and altruism? In general, neither self- nor other-regarding utility are identical across contexts. However, for a subset of participants, their utility in one context is systematically related to their utility in the other context. The final study in this dissertation investigates behavior in two simplified, risky versions of cooperative altruism situations. In the first situation, an individual's altruistic act is necessary to help their beneficiary but is not sufficient. In the second, an individual's altruistic act is sufficient but not necessary. The results of this study suggest that altruism and risk aversion are systematically integrated to determine whether people will help under risk. It also reveals that the way in which a potential benefactor's altruism and risk attitudes determine their risky giving behavior depends on which of the Two Roads to Altruism they are on. In sum, this dissertation finds that to understand the foundations of cooperative altruism, each of the following factors must be taken into account: the cost of giving relative to one's endowment; the (expected) impact of giving; the type of cooperative altruism situation; a person's degree of altruism and risk tolerance; and their particular altruism type, the Two Roads to Altruism.