The generosity spillover effect of pledges in a two-person giving game

This paper analyses the equilibrium of a two-person “pledge and give” game and tests its predictions in a lab experiment. Each person’s endowment is private information. In the first stage, each agent informs the other about the amount he/she intends to give. In the second stage, each agent makes a contribution to the joint donation. We show that a linear pledge function can be an equilibrium of the game. Furthermore, if agents have a strong taste for conformity, the equilibrium donation is positively related to one’s own endowment and to the pledge of his partner. In the lab, subjects pledged on average 60% of their income and donated on average 50% of their income. High pledges foster the generosity of the partner: an agent will increase the donation by 20 cents on average if the partner pledges one extra euro. Link to the article

BESANCENOT, D. and VRANCEANU, R. (2021). The generosity spillover effect of pledges in a two-person giving game. Journal of Behavioral and Experimental Economics, 90, pp. 101630.

Keywords : #Experiments, #Giving, #Communication, #Pledges, #Social-influence