8:30 – 10:30am

Session Five Altruistic Behaviour Research and Neuroeconomics

Moderator: GARY STEINBERG, M.D., Ph.D., Director, Stanford Institute of NeuroInnovation and Translational Neurosciences, Stanford University BILL HARBAUGH, Ph.D., Economics, University of Oregon ULRICH MAYR, Ph.D., Psychology, University of Oregon JIM ANDREONI, Ph.D., Economics, University of California, San Diego Discussants: DACHER KELTNER, Ph.D., Psychology, University of California, Berkeley

Is it Better to Give or to Receive? Bill Harbaugh, Ph.D. University of Oregon While every charitable act involves a recipient as well as a giver, almost all experimental work on altruism focuses on the giver. The research in this proposal is designed to complete the circle, by providing a neural explanation for what goes on inside the minds of people who are receiving charity. Charity is a mixed blessing, and we think that knowledge about how recipients feel about receiving help can guide more effective and more genuinely altruistic methods of giving. We believe that the choices and feelings of the recipients are every bit as important as those of the givers, both in terms of the effectiveness of charitable projects in practical and utilitarian terms, and also in terms of understanding the true motives of the donors. This point is well recognized in anthropology and in religion. For example one reason for Maimonides’s preference for secret gifts, a cornerstone of Judaic thought about charity, is that they do not humiliate the recipient. Our pilot experiment tests the hypotheses that recipients of charity care about how they became eligible for the aid and how much the aid to them costs other deserving people. The experiment uses financial aid to college students, since this is a relatively homogenous group with easily measured characteristics. We recruit students with GPA's above 3.0 who are also receiving federal financial aid (loans or grants), on the basis of low family income. We then give students modest “fellowships” ($50 to $150) based on the criteria below. • • Moderate Merit: GPA > 3.0 Moderate Need: Eligible for federal loans but not the maximum Pell grant

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High Merit: GPA > 3.8 High Need: Eligible for the maximum Pell grant (very low family income)

To provide the neural data to disentangle reactions to aid and choice processing, there are both mandatory and voluntary conditions. In the mandatory conditions, subjects are just told that they have received a certain amount from a certain fund, and we will record the resulting brain activation. In the voluntary conditions subjects are given a series of choices between accepting different amounts from different funds. As in any charitable situation, when a subject gets aid, less will be available in that fund to distribute to the others. This will be implemented by giving any aid not distributed in the experiment away to other eligible students. We have run 24 subjects and have analyzed the behavioral data. Subjects are very sensitive to the variables of interest: they are more likely to accept aid when they are qualified with respect to GPA or need, they prefer merit aid to need aid, and they are less likely to accept aid when it reduces what is available for others. We’re currently analyzing the neural data, and we hope to have preliminary results to present at the conference.

Questions: 1. While looking at receivers is rare in experimental economics, we know that it’s more common in other disciplines. Bill had an interesting conversation with Scotty in Seattle about the Christian social justice movement, and the desirability of decreasing the stigma associated with receiving charity. We need to learn more about this stigma effect, more about attitudes from other religions, and more about analyses from non-economic disciplines. We believe that religious traditions can be thought as filters of good and bad practices regarding altruism, with centuries of time to refine those practices. Most have clear teachings about giving. What do religions teach about the feelings of the recipients of charities? What are the connections between what a religion has to say about giving, and what it has to say about receiving? 2. We want this research to lead in the direction of practical applications for the design of programs that give to others. These could be government programs or private charities. One approach would be to see negative feelings about receiving charity as a tradeoff: they reduce the benefits that the deserving get from charity, but they decrease the likelihood that the undeserving will take up the charity, and reduce the amount available for others. Some policies might actually try to reinforce these negative feelings, to increase the chances that charity goes to the most deserving. Clearly a better understanding of the feelings of the receivers is important to doing this efficiently. What other aspects of the feelings of receivers are likely to matter for policy? 3. It seems likely that the charity has a sort of “option value” to the potential recipients. Knowing that it’s available provides a safety net. Using it has obvious benefits. Knowing that they did not use it, but left it for someone more deserving – may create additional emotional benefits. In sort, looking at receivers seems to create a much richer picture of charity and

compassion, and we’d like people to think about other similar examples, and how they might be studied. 4. Truly altruistic givers must think about the feelings of the recipients – not just about whether they need the assistance, or in what form it should be provided, but also about how charity will make them feel. In some traditions the giver is actually beholden to the recipient – because the recipient provides the giver with a chance to be altruistic. We would like to discuss possible experiments that might explicitly link the givers and recipients together, and examine these sorts of mutual benefits and their effect on giving.

Neural Evidence Reveals Motives behind Altruistic Behavior: Ulrich Mayr, Ph.D. University of Oregon People can show altruistic behavior. However, as there is almost always a many-to-one mapping between potential motives and behavior, researchers across disciplines have debated for decades whether altruistic behavior is motivated by either "true altruism" or less charitable motives (such as signaling of wealth or character). Neuroimaging provides a new way of assessing motives of behavior by observing individuals' activity in "reward areas" to critical events, even in the absence of a behavioral choice. I discuss here how this approach can be used to distinguish between different motives of charitable giving (Harbaugh, Mayr, & Burghart, 2007). Our results are consistent with a rational choice explanation of altruistic behavior where money to oneself and money to the charity independently enter into utility computations. In ongoing work we examine whether more complicated situations, such as giving in public versus private, can be handled by the same simple model or whether it needs to be augmented by additional pathways to altruistic behavior.

Questions: 1. What are potential pedagogical implications of the fact that altruistic behavior can engage reward areas? 2. Can the basic "neuroeconomic rational-choice model", which assumes that every behavioral choice is funneled through utility computations in midbrain reward areas, account for the whole range of altruistic behavior? 3. Our results suggest that how much we like money for ourselves and how much we like to see others better off independently predict altruistic behavior (with opposing signs). What are the psychological and economic factors that determine each of these two aspects?

Understanding Altruistic and Charitable acts from the Standpoint of Economics James Andreoni, Ph.D.

University of California, San Diego Understanding altruistic and charitable acts has been a vibrant topic of discussion in economics for over 30 years. In particular, how can a discipline founded on the notion that people behave in their own self interest be reconciled with behavior that seems to be directed at improving the interests of others? I will discuss some of the prevailing foundational assumptions and modeling economists have done to try to understand this. I will discuss what we’ve learned from experimental studies on giving. Finally, I will summarize what we know about the most easily observable act of economic altruism, that is, charitable giving.

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