Version of 6/16/2005 12:40:00 PM Motives for Giving: A Reanalysis of Two Classic Public Goods Experiments*

In laboratory public goods experiments, subjects make decisions about how much of a fixed endowment to contribute to the production of a public good in a sequence of periods. The nature of subjects’ responses to information about others’ decisions can help distinguish between alternative motives for giving, such as altruism, warm glow, reciprocity and inequality aversion. In this paper we reanalyze two published experimental studies of public goods and focus on the nature individuals’ responses to others’ behavior. We find economically and statistically significant dynamic interactions among subjects. The dynamic patterns indicate support for reciprocity and inequality aversion motives, but little for altruism and warm glow. We also conclude that individual-level analysis of existing public goods data can provide more insightful, informative estimates of treatment effects on behavior. Finally, we cast doubt on the notion that random rematching of subjects can induce statistical or strategic independence across decision periods. JEL Codes: C9, H41, Z13