Social discounting and risk attitudes, time preferences and social preferences: an experimental study

Abstract

Altruism, the principle or practice of concern for the welfare of others, is a key element of human behaviour. It is vital to gain more knowledge on how altruism is associated with economic and other social preferences in order to get a more nuanced understanding of peoples’ economic and social interactions. This thesis aims to extend research on social discounting in two areas, namely: how preferences for giving and social discounting differ in laboratory and field subjects, and how preferences for giving and social discounting are associated with various other economic and social preferences. The study comprises a series of conventional laboratory experiments and a set of artefactual field experiments with students and staff, respectively, from the University of the Free State in South Africa. These experiments employ social discounting tasks (SDT), multiple price lists (MPLs) for eliciting risk and time preferences, and ultimatum games (UG) and a trust games (TG) as tools for preference elicitation. Descriptive statistical analyses that investigate associations between key variables and appropriate regression models are employed in the thesis. A number of key findings are highlighted in the thesis. First, the thesis finds no consistent evidence of significant differences in preferences for giving and social discounting across laboratory and field subjects. Secondly, the thesis finds that the motivations for altruistic behaviour amongst laboratory and field subjects differ significantly with regard to the choice of recipients and the nature of the relationships with the recipients. The third finding suggests that risk and time preferences are correlated with altruism, as measured by giving and social discounting, but that this association is complex and non-linear in nature. Finally, the thesis provides evidence that altruism is associated with egalitarianism, reciprocity and, to a lesser extent, with trust, as well as with the trustworthiness. Giving and social discounting, therefore, are important features of human behaviour and requires further investigation pertaining to its economic and social consequences.