Does charity affect economic bargaining? Exploring gender × social distance interactions

Purpose - In recent years, it is increasingly common to find situations in which economic or financial decisions are combined with philanthropic or charity issues (for example, “pay what you can”, cause-related marketing initiatives and micro-insurance). How do people behave in these situations? This study aims to analyze whether charity impacts agents’ economic behavior and which factors (gender and social distance) influence these decisions. Design/methodology/approach - Using a modified one-period ultimatum game that includes a charitable giving variable, the authors investigate agents’ behavior in economic decisions when philanthropic issues are considered, and they compare this behavior to purely economic negotiation without explicit philanthropic relevance. Using a sample of 352 undergraduate business students, the authors explore the interaction effect between gender and social distance on giving behavior. Findings - The results of this study show that women offer more than men when philanthropic motivation is involved. However, the solicitation of a charitable sentiment is not an element that substantially shifts the offers beyond the value considered to be economically fair. Finally, women and men are both susceptible to self-image concerns. Research limitations/implications - The results enable a more nuanced interpretation of gender differences in economic decisions when philanthropic or charity issues are involved. From a practical perspective, the findings could offer insights relevant to for-profit and non-profit organizations when they plan to provide products, services or investments with positive moral connotations or when they plan fundraising strategies. Originality/value - Unlike existing laboratory studies, this study focuses on the effects that charity has on economic/financial decisions by exploring the interaction effect between the decision-maker’s gender and social distance on the outcome of the negotiation.