Does generosity generate generosity? An experimental study of reputation effects in a dictator game

Abstract

Previous experimental literature on reputation studies its effects in environments where they are often confounded with strategic behavior. This paper explores how information about the paired subject’s previous action affects one’s own behavior in a non-strategic environment of a dictator game. The experiment consists of two treatments in which dictators can give money to the paired player: one where the recipient is a stranger and the other where the dictator has information on the recipient’s reputation. The data provide evidence that on average the dictators send more money to recipients with a reputation for being generous than to recipients with no reputation. The results contribute to our understanding of how impulses towards generous (or selfish) behavior might arise.