Speaker:Jianlin Zhang，Singapore Institute of Management

Date:Monday, March 26, 2012.

Time:19:00 pm - 20:00 pm

Venue:Room 501, Run Run Shaw Science Building, Central Campus

Sponsor:The Center of Economic Research Shandong University

Abstract:

We experimentally investigate the effect of endowment allocation procedures on social preferences using a two-stage dictator game. In the first stage, participants who were randomly selected as allocators had to perform a task in order to earn money. Better performance on the task resulted in higher earnings. In our baseline meritocratic treatment, the allocators' initial endowment was set equal to their individual earnings. We compared this with an egalitarian treatment whereby the allocators' initial endowment was set equal to the average earnings of all allocators. Essentially, high performers were taxed and underperformers were subsidized by the high performers. In the second stage, the allocators had to divide their endowment with the recipients. We show that the allocators were more generous in the egalitarian treatment than in the meritocratic treatment. Interestingly, being taxed did not reduce the high performers' generosity but being subsidized did significantly increase the underperformers' generosity. Thus, being treated kindly induced the underperformers to reciprocate forward to other people.

For further information, please visit:http://www.cer.sdu.edu.cn/articleshow.php?id=2200