1 February 2018
- Macquarie University experimental economists have investigated if the perceived intent behind generous acts impacts how they are rewarded
- Using the stylized versions of a lost wallet scenario and an interaction between an investor and an entrepreneur, the researchers found one’s generosity is likely to be rewarded in the same way regardless of perceived intent
- Findings suggest it is ok to be strategic generous, as long as your original action towards that person is kind.
Helping someone out of self-interest, rather than out of pure goodwill, is still likely to be well received and rewarded, according to new Macquarie University research published in Experimental Economics, the leading journal of the Economic Science Association.
“People can be strategically generous, with the hope of gaining a reward, or they can be selflessly generous,” says one of the authors and Professor of Economics at Macquarie Graduate School of Management Maroš Servátka.
“We wanted to know: do you react differently if you think someone is only offering to help you for his or her own benefit?”
To answer this question, the researchers conducted a series of laboratory experiments, including the “lost wallet game,” in which someone found a “wallet” worth $20 to the owner and chose whether to return it. The researchers found that 95 per cent of people returned the “wallet” if they thought they would be rewarded and earn more than the “wallet owner”, compared to 78 per cent who returned the wallet out of good will. However, the “wallet’s owner” rewarded both groups of people almost exactly the same.
The decisions of participants were financially incentivized, a crucial aspect of the experimental economics methodology, as their final dollar earnings depended on the actual choices whether or not to return the “wallet” and how much to reward.
“We found in most cases people don’t care why you’re being kind, they just care about the actual kindness,” says Daniel Woods, a third-year PhD student of Economics at the Purdue University in the United States who co-authored the paper.
“People tend to reward generous behavior, even if they believe the generosity is self-serving.
“Take, for example, countries with a tipping culture. If service is exceptional, even if you can tell a waiter is treating you well just to get a tip, most people will reward the generosity anyway because they had a good experience.”
Another experiment involved investments, in which someone is given $10 to either give to a second person or keep for themselves. Whichever amount they give the second person, from $0 to $10, triples. The second person can then choose to give a portion of the money back to the first.
The first mover may give away their full $10 to the second person, which triples to $30, in the hope of receiving part of that back. The academics tested how the receiver rewarded the first mover based on the perceived intent of the giving – selfless or self-serving – and found the receiver tended to reward a generous act equally, regardless of self-serving or selfless motives.
“Life is full of examples where people or firms perform kind acts because being seen to be kind has a potential benefit. People pretend to be kind,” says Professor Servátka.
“But ultimately, our findings suggest that people shouldn’t worry about the intentions behind their generosity, as they are likely to be rewarded the same way.”
“Our research also sheds light on why consumers do not respond negatively to CSR activities of firms which are meant to increase the market share and profits. Even though consumers might be aware that the firm’s behaviour is strategic, they mostly pay attention to the fact that the firm is not destroying the environment or contributes to charity, say, and evaluate the impact rather than the motivation behind the observed actions.”
Woods D. and Servátka M. Nicer to you, Nicer to me: Does Self-Serving Generosity Diminish the Reciprocal Response. Experimental Economics. 30 January 2018. https://doi.org/10.1007/s10683-018-9561-8