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Pro-social preferences and risk aversion with different payment methods: Evidence from the laboratory

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  • Li, Jingping
  • Zheng, Jin Di

Abstract

With the advance of smart devices and financial technologies in place, economic transactions involving mobile payments are becoming increasingly preferred. The COVID-19 pandemic has further promoted the adoption of mobile payment since it is faster and more hygienic than cash payment. However, empirical evidence is scarce on whether people would react differently when the transaction is made through mobile or cash payment. In this paper, we examine whether the payment method has an impact on prosocial decisions and risk attitudes using standard laboratory games such as the dictator game, the ultimatum game as well as the conventional Holt and Laury (2002) risk assessment. After controlling a rich set of demographic characteristics, including age and gender, we find subjects are more generous when they use mobile payment compared to cash, but the payment effect on risk attitude is not evident.

Suggested Citation

  • Li, Jingping & Zheng, Jin Di, 2023. "Pro-social preferences and risk aversion with different payment methods: Evidence from the laboratory," International Review of Economics & Finance, Elsevier, vol. 87(C), pages 324-337.
    • Handle: RePEc:eee:reveco:v:87:y:2023:i:c:p:324-337
    DOI: 10.1016/j.iref.2023.04.007
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    More about this item

    Keywords

    Social preferences; Risk aversion; Laboratory experiment; Cash payment; Mobile payment; Wechat Pay;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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