Working Paper
Rao G, DellaVigna S, List J, Malmendier U. Estimating Social Preferences and Gift Exchange at Work . [Internet]. Working Paper. PDFAbstract

We design a model-based field experiment to estimate the nature and magnitude of workers' social  references towards their employers. We hire 446 workers for a one-time task. Within worker, we vary (i) piece rates; (ii) whether the work has payoffs only for the worker, or also for the employer; and (iii) the return to the employer. We then introduce a surprise increase or decrease in pay (`gifts') from the employer. We find that workers have substantial baseline social preferences towards their employers, even in the absence of repeated-game incentives. Consistent with models of warm glow or social norms, but not of pure altruism, workers exert substantially more effort when their work is consequential to their employer, but are insensitive to the precise return to the employer. Turning to reciprocity, we find little evidence of a response to unexpected positive (or negative) gifts from the employer. Our structural estimates of the social preferences suggest that, if anything, positive reciprocity in response to monetary `gifts' may be larger than negative reciprocity. We revisit the results of previous field experiments on gift exchange using our model and derive a one-parameter expression for the implied reciprocity in these experiments.

Rao G, Bursztyn L, Fiorin S, Ferman B, Kanz M. Status Goods: Experimental Evidence from Platinum Credit Cards. Working Paper.Abstract

Economists have long hypothesized that social status considerations are a powerful driver of consumption choices (Veblen 1899). But empirically identifying status goods is difficult, since status components of consumption are confounded by unobserved instrumental utility. We work with a large bank in Indonesia to market their widely-recognized platinum credit cards, typically restricted to high-income customers, to a marginally eligible population of customers. In a control group, customers are offered all the financial services and benefits of the platinum card, but as an included upgrade on their existing nondescript credit card. In two treatment groups, customers are instead offered the platinum card itself. We find that demand for the platinum card is substantially higher than demand for the instrumental benefits, providing evidence of the importance of image considerations. We provide evidence that the demand for the platinum card appears to be driven substantially by social image concerns, rather than self image or identity. We find that it is the less-rich (middle-class) individuals in the sample who show a demand for the social image aspect of the platinum card, rather than the very rich. An analysis of the utilization of the credit cards reveals that platinum card holders are causally more likely to use the card in social situations such as restaurants, bars and clubs, where the card may be visible to others. In contrast, there are no effects on more private uses of the card, such as online purchases. Finally, we provide evidence of "fashion cycles" in the marketing of elite credit cards, consistent with models of status goods (Pesendorfer 1995).

Rao G. Familiarity Does Not Breed Contempt: Diversity, Discrimination and Generosity in Delhi Schools. [Internet]. Working Paper. Download PaperAbstract

I exploit a natural experiment in India to identify how mixing rich and poor students in schools affects social preferences and behaviors. A policy change in 2007 forced many private schools in Delhi to meet a quota of poor children in admissions. This led to a sharp increase in the presence of poor children in new cohorts in those schools, but not in older cohorts or in other schools. Exploiting this variation, and using a combination of field and lab experiments, administrative data and test scores, I study impacts on three classes of outcomes: (i) prosocial behavior, (ii) social interactions and discrimination, and (iii) academic outcomes. First, I find that having poor classmates makes wealthy students more prosocial and generous. They become more likely to volunteer for a charity at school, more generous towards both rich and poor students in dictator games, and choose more equitable distributions of payoffs in the lab. Second, having poor classmates makes wealthy students discriminate less against poor children, measured by their teammate choice in an incentivized sports contest. Consistent with this, they become more willing to socialize with poor children outside school. Third, I find marginally significant negative effects on test scores in English, but no effect on Hindi or Math. Overall, I conclude that mixing in schools had substantial positive effects on the social behaviors of wealthy students, at the cost of negative but arguably modest impacts on academic achievement. To shed light on mechanisms, I exploit idiosyncratic assignment of students to study groups and find that the effects on social behaviors are largely driven by personal interactions between wealthy and poor students, rather than by changes in teacher behavior or curriculum.

Rao G, DellaVigna S, List J, Malmendier U. Voting to Tell Others. Review of Economic Studies [Internet]. Forthcoming. Download PaperAbstract

Why do people vote? We design a field experiment to estimate a model of voting `because others will ask'. The expectation of being asked motivates turnout if individuals derive pride from telling others that they voted, or feel shame from admitting that they did not vote, provided that lying is costly. In a door-to-door survey about election turnout, we experimentally vary (i) the informational content and use of a flyer pre-announcing the survey, (ii) the duration and payment for the survey, and (iii) the incentives to lie about past voting. The experimental results indicate significant social image concerns. For the 2010 Congressional election, we estimate a value of voting `because others will ask' of $5-$15, one of the first estimates of the value of voting in the literature.

turnout16-05-23.pdf Online Appendix [PDF]
DellaVigna S, List J, Malmendier U, Rao G. The Importance of Being Marginal: Gender Differences in Generosity. American Economic Review (Papers and Proceedings) [Internet]. 2013;103 (3) :586-90. Download PaperAbstract

Do men and women have different social preferences? Previous findings are contradictory. We provide a potential explanation using evidence from a field experiment. In a door-to-door solicitation, men and women are equally generous, but women become less generous when it becomes easy to avoid the solicitor. Our structural estimates of the social preference parameters suggest an explanation: women are more likely to be on the margin of giving, partly because of a less dispersed distribution of altruism. We find similar results for the willingness to complete an unpaid survey: women are more likely to be on the margin of participation.

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