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The impact of background risk on altruistic giving

Author

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  • Mickaël Beaud

    (CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier)

  • Yujiang Sun

    (CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier)

  • Marc Willinger

    (CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier)

Abstract

This paper investigates the effect of an additive unfair background risk on the optimal donation behavior of a purely altruistic decision-maker in the dictator game. Assuming both the dictator and the recipient face this background risk, and that the dictator is risk-vulnerable, we find that the presence of background risk reduces the deviation of the optimal donation from an equal split. This outcome holds whether the dictator's fairness is evaluated ex-ante or ex-post, offering new insights into the implications of risk vulnerability.

Suggested Citation

  • Mickaël Beaud & Yujiang Sun & Marc Willinger, 2025. "The impact of background risk on altruistic giving," Working Papers hal-04929525, HAL.
    • Handle: RePEc:hal:wpaper:hal-04929525
    DOI: 10.2139/ssrn.4984654
    Note: View the original document on HAL open archive server: https://hal.inrae.fr/hal-04929525v1
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