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Nothing to Lose: Charitable Donations as Incentives in Risk Preference Measurement

Published online by Cambridge University Press:  14 September 2017

Jonathan Rogers
Jonathan Rogers*
Affiliation:
Instructor of Political Science at New York University Abu Dhabi. PO Box 129188, Abu Dhabi, UAE. Phone: +971 2 628 5445, e-mail: jonathan.rogers@nyu.edu
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Abstract

Researchers are interested in running experiments in the Middle East and North Africa (MENA), which often include financially incentivized measures of risk preferences. However, it can be that gambling is forbidden and these measures may either be illegal or result in non-random refusal of subjects to participate. If individuals derive utility from warm glow or otherwise enjoy giving, then risk preferences apply to that utility too. Even in the absence of personal stakes, if risk will be borne by others, warm glow will lead subjects to behave in a manner consistent with their preferences over risk for private consumption. I examine how paid risk elicitation mechanisms correlate with measures incentivized by charitable contributions. Results suggest that subjects behave almost identically under paid and charitable stakes. Charitable measures may provide behavioral means by which to measure risk preferences, in populations where gambling is forbidden.

Keywords

Risk preferencesother regarding behaviorexperimentsMiddle East
Type
Research Article
Information
Journal of Experimental Political Science , Volume 4 , Issue 1 , Spring 2017 , pp. 34 - 56
Copyright
Copyright © The Experimental Research Section of the American Political Science Association 2017 

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