Sponsor: Iowa State University and IIM Bangalore

Project Team: Manaswini Bhalla, Tushi Baul and Tanya Rosenblat  

Summary:  Charitable giving is motivated by altruism towards others. We want to analyze to what extent social preferences are an intrinsic characteristic and to what extent they are acquired through social interaction. We distinguish between two acquisition channels: (1) Agents interact repeatedly with socially close neighbors; this creates directed altruism. For example, a few researchers observe that directed altruism raises giving by about 50% compared to baseline giving to strangers in dictator games. (2) Agents are influenced by and imitate the social preferences of those with whom they interact. For example, a few researchers find that greater interaction with an African-American roommate makes white students more supportive of affirmative action and related policies even after leaving college.