Template-Type: ReDIF-Paper 1.0
Title: Motivated by Others' Preferences? An Experiment on Imperfect Empathy
Author-Name: Jana Hofmeier
Author-Email: jana.hofmeier@uni-bonn.de
Author-Name: Thomas Neuber
Author-Email: thomas.neuber@uni-bonn.de
Classification-JEL: D64, D90, D91
Keywords: altruism, empathy, prosocial giving

Abstract: People care about others. But how do they assess the utility of others when making other-regarding decisions? 
Do they apply their own preferences or do they adopt the preferences of the other person?
We study this question in a laboratory experiment where subjects in the role of senders can pay money to avoid harm arising to receivers. 
In a first step, we elicit all subjects’ willingness to pay (WTP) for not having to eat food items containing dried insects. 
We then show senders the WTPs of receivers and repeat the elicitation procedure, but now with receivers having to eat the food 
items and senders stating their WTPs to spare the receivers from having to eat them. We find that not only receivers’ preferences 
matter for decisions but also senders’ own preferences, a phenomenon for which we use the term imperfect empathy. 
In motivating prosocial transfers, senders’ and receivers’ WTPs act as complements by reinforcing each other. 
Conversely, pairs of sender and receiver who are dissimilar generate lower transfers than others. Since transfers 
usually benefit receivers more than they cost senders, we also find that dissimilarity within pairs reduces welfare. 
Our results complement the extensive literature on prosocial preferences, which so far abstracts from heterogeneous 
valuations. The implications might be far-reaching. For public welfare systems, e.g., systematic differences in consumption 
preferences between net payers and recipients could undermine public support.

Note: 
Length: 34
Creation-Date: 2019-05
Revision-Date: 
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp096
File-Format: application/pdf
Handle: RePEc:bon:boncrc:CRCTR224_2019_096