Altruistic Preferences Research Articles

Altruistic preference and government subsidies in a manufacturing-recycling system with eco-design

Altruistic preference (AP) and government subsidies are both crucial for manufacturing-recycling systems to stimulate eco-design and recycling. This paper discusses the impacts of AP and two government subsidies (an eco-design subsidy and a recycling subsidy) on a manufacturing-recycling system with eco-design, and explores rational AP coefficient and subsidy strategies from the perspective of the economy, environment, and social welfare. The principal results are 1) AP will improve the eco-design level and recycling rate, but the AP coefficient should be set below a certain threshold; 2) recycling subsidy is always conductive to both eco-design and recovery, while eco-design subsidy only has this effect when manufacturers develop recycling-biased eco-design; 3) eco-design subsidy has more negative spillover effects and sometimes conflicts with the effect of AP; and 4) subsidies are crucial in manufacturing-recycling systems with AP but governments should implement an appropriate subsidy strategy based on the specific goals and types of the eco-design.

Altruism, social norms, and incentive contract design

We study theoretically and empirically the relation between altruism and incentive contract design. Theoretically, we extend Fischer and Huddart (2008) to investigate how social norms reinforce managers’ altruistic preferences, thus affecting the optimal contract design related to incentive strength and performance measurement. Empirically, we draw on the notion of an organization’s work climate to capture managers’ altruistic preferences. Using data collected from a sample of 557 managers, we find that in a work climate where managers are mostly out for themselves, firms have lower pay-for-performance sensitivity and place a greater weight on aggregate performance measures. In addition, respondents report that they engage more in undesirable actions that are unproductive and costly to firm owners. In contrast, in a work climate where managers care about others (including peers in their organizational unit), firms place lower weights on aggregate performance measures. At the same time, respondents report that they supply more effort and engage less in undesirable actions.

How virtue signalling makes us better: moral preferences with respect to autonomous vehicle type choices

One of the moral questions concerning autonomous vehicles (henceforth AVs) is the choice between types that differ in their built-in algorithms for dealing with rare situations of unavoidable lethal collision. It does not appear to be possible to avoid questions about how these algorithms should be designed. We present the results of our study of moral preferences (N = 2769) with respect to three types of AVs: (1) selfish, which protects the lives of passenger(s) over any number of bystanders; (2) altruistic, which minimizes the number of casualties, even if this leads to death of passenger(s); and (3) conservative, which abstains from interfering in such situations. We differentiate between scenarios in which participants are to make their decisions privately or publicly, and for themselves or for their offspring. We aim to answer two research questions: (1) whether the public visibility of the choice of an AV type choice make this choice more altruistic and (2) which type of situation makes it more difficult to choose altruistically: when choosing for society as a whole, when choosing only for oneself, or when choosing only for one’s offspring. Our results show that respondents exhibit a preference for an altruistic strategy for AVs and that it is reinforced when signaled to others. The altruistic preference is strongest when applies to everybody else, weaker when it reflects a solely personal choice, and weakest when choosing for one’s own child. We conclude that a public choice is considerably more likely to pressure consumers into accepting a more socially beneficial solution.

The impact of network externalities and altruistic preferences on carbon emission reduction of low carbon supply chain

This paper explores the manufacturer's carbon emission reduction in the presence of network externalities and altruistic preferences. Existing literature mainly analyzes the impact of government regulations and firms' behavior characteristics on manufacturers' decisions, while little literature investigates the role of network externalities and altruistic preferences in promoting carbon emission reduction of manufacturers. Our results show that network externalities and altruistic preferences are conducive to improving manufacturers' profits and carbon emission reduction levels. However, we find that manufacturers' carbon emission reductions are more likely to be optimal without network externalities and altruistic preferences when the cost of low-carbon technologies is low, and consumer preferences are high. Interestingly, when the low-carbon technologies cost is high, the combined effect of network externalities and altruistic preferences is more favorable for manufacturers to implement carbon emission reductions. However, when the cost of low-carbon technologies is moderate, we find that the combined effect of network externalities and retailers' altruistic preferences does not always increase the level of carbon emission reductions. In addition, we also find that network externalities or altruistic preferences enhance manufacturers' ability to afford the costs of low-carbon technologies, which implies that manufacturers are more inclined to reduce carbon emissions compared to scenarios without network externalities and altruistic preferences.

Economics of the community mechanism

This paper discusses the importance of the community mechanism that complements the market and power mechanisms in an economic system during an era of crisis, defined as a mechanism for resource allocation by which at least one person proposes voluntary cooperation, and the proposal is not rejected. While this community mechanism can function alongside homo economicus in win–win situations, it can be further activated with social preferences for altruism and reciprocity and with norms or worldviews that encourage cooperation. Other factors that relate to these include the character strengths that contribute to community and society known as virtues, with the concept of wellbeing related to virtues being known as eudaimonia. Some aspects of the acquisition of virtues can be viewed as changing preferences, and there is empirical evidence suggesting changes in trust relate to changes in preferences. Leadership is an example of the virtue of justice, and servant leadership seems important for the community mechanism, as does perspective taking. For evaluating policies, normative economics based only on consequentialism may not be sufficient, and virtue ethics seems essential when the community mechanism is important.

Green Supply Chain Innovation Strategies, considering Government Subsidy and Altruistic Preference

To study the impact of government subsidies and altruistic preferences on green supply chain innovation, Stackelberg game theory and numerical simulation are used to analyze and verify the optimal decision-making of enterprises under different decision-making models. The results show that the two methods of government subsidies can improve product greenness, corporate profits, and overall supply chain performance. While only the unilateral altruistic preference of the manufacturer or retailer can improve product greenness, the profit of the other member, and the overall profit of the green supply chain, doing so will reduce its own profit. When the two members have the same degree of altruistic preference, the retailer’s altruistic preference is more conducive to improving product greenness. Increasing government subsidies can strengthen, to a certain extent, the effect of altruistic preference on product greenness, the profit of the other member, and the profit of the green supply chain. However, when the manufacturer implements altruistic preference, if the government subsidy exceeds a certain range, then the increase in the government subsidy will accelerate the decline of the manufacturer’s own profit.

Emission taxes for genuine altruistic firms

AbstractThis article develops a theoretical model that explores firms' abatement choices. The main results are: First, in a market comprised of a not sufficiently large number of heterogeneous firms always there exists a subset of firms that are willing to undertake abatement activities, if their marginal altruistic cost of emissions is positive. Second, a low emission tax induces abatement when a firm is egoistic or if its altruistic cost of emissions has a concave structure. In contrast, if the firms’ altruistic cost of emissions has a convex structure, then intermediate emission taxes are required. Third, the effect of firms’ altruistic cost of emissions on the emission tax that induce the socially optimum abatement is also conditional on the genuine altruistic preferences and finally, the social planner has an incentive to impose a Pigouvian emission tax when firms are profit maximizers. Otherwise, a lower tax suffices.

Green Product Pricing and Purchasing Strategies in a Two‐Period Supply Chain considering Altruistic Preferences

With improvements in consumers’ environmental awareness and the promulgation of environmental regulations, an increasing number of companies are beginning to pay attention to green product design, pricing, and purchasing strategies. However, due to demand fluctuations and cost changes brought about by green product design and manufacturing, understanding corporate behavior preferences and constructing non‐single‐period pricing and procurement strategies can profoundly affect long‐term cooperation among green supply chain members. This paper constructs six scenarios in which decision‐makers have altruistic preferences simultaneously or separately and whether the retailer adopts strategic inventory. In addition, the impact of altruistic preferences and strategic inventory on the decision‐making and profits of the two‐period supply chain for marginal cost‐intensive green products (MIGPs) are analyzed. The results show that altruistic preferences and purchasing strategies do not affect MIGPs’ greening levels. Besides, the retailer’s strategic inventory is still an effective bargaining tool but is not necessarily beneficial to profits. Noteworthy, when deciders exhibit altruism simultaneously or alone, the effects on certain decisions and strategic inventory range are significantly different. Finally, the retailer’s altruistic preference may not affect the green supply chain’s profits, but the manufacturer’s altruism improves total profits.

Dynamic Cooperative Value-Added Service Strategies of the Smart Manufacturing Platform Considering the Network Effect and Altruism Preference

Dynamic Cooperative Value-Added Service Strategies of the Smart Manufacturing Platform Considering the Network Effect and Altruism Preference

Pure altruism and misjudgement: A bad combination?

Stated preference studies on the value of health risk reductions have found valuations elicited from a private perspective to be both higher and lower compared to valuations elicited from a public perspective. Although relevant, the individual's ability to correctly predict the valuation that other individuals assign to the risk reduction has been insufficiently researched. We aim to verify whether individuals exhibit pure altruistic preferences and if this is the case, whether the presence of pure altruism leads to biased valuation of public risk reductions due to misjudgement about other individuals' preferences. We conduct a large-scale online incentivised experiment as a variant of a public good game in which the individual's final endowment is determined by choices made in the experiment. Results suggest that individuals act as pure altruists and hence try to account for the benefits obtained by others of being insured. The results also suggest that individuals fail to correctly predict other individuals' benefits from the insurance, which leads to non-optimal outcomes and biased valuations.

Evolutionary Game of Multi-Subjects in Live Streaming and Governance Strategies Based on Social Preference Theory during the COVID-19 Pandemic

After the outbreak of the COVID-19, offline consumption has been significantly impacted. For the sake of safety, online consumption has become the most common manner, and this has generated e-commerce, which not only breaks the spatio-temporal or regional restrictions, but also conforms to the normal economic development needs for epidemic prevention and control. However, this new business model causes problems such as the shortage of post-sales service, false publicity, and uneven quality of live streaming anchors, seriously affecting the interests of consumers. Therefore, it is urgent to strengthen the management of the chaos of live streaming. This study focuses on exploring the problems and the behavioral strategies of stakeholders in the governance process. The paper obtained online user comments by python, and used topic clustering and subject extraction methods to dig out the problems and related multiple subjects in live streaming at first. Secondly, the theory of social preference was introduced to construct an evolutionary game model among multiple subjects, and how to guide the behavioral decision-making of multiple subjects to standardize and rationalize was studied, so as to control the problem of live streaming. Finally, simulation experiments were conducted and the results demonstrated that: (1) Compared with strengthening the reciprocal preference of the government, live streaming platforms, and consumers, changing the individual’s altruistic preference is more effective in controlling the chaos of live streaming; (2) weakening the platform’s altruistic preference for anchors is conducive to creating a good live streaming environment; and (3) changing consumers’ altruistic preference or reciprocal preference is less effective in promoting the governance of the live streaming environment.

A Framework for Investing with Altruism

I propose and develop a framework for the financial economic analysis of investing with altruistic preferences. A key part of the framework is the precise definition of different forms of impact and, in particular, investor impact. This has several practical implications including that investor impact is not a measurable, rival good but rather a decision-making tool that should be carefully and independently assessed by each investor. I also introduce the concept of total portfolio returns, which capture all effects relevant to an investor's mission including financial, impact, and strategic returns and mission-correlated premia. The adaptability and coherence of this framework makes it suitable for both further research and practical applications.

Preferences, trust, and performance in youth business groups.

We study how social preferences and norms of reciprocity are related to generalized (outgroup) and particularized (ingroup) trust among members of youth business groups in northern Ethiopia. The Ethiopian government promotes youth employment among land-poor rural youth by allocating them rehabilitated communal lands for the formation of sustainable businesses. The typical sustainable production activities that the groups can invest in include apiculture, forestry, horticulture, and livestock production. Our study used incentivized experiments to elicit social preferences, trust, and trustworthiness. We use data from 2427 group members in 246 functioning business groups collected in 2019. Altruistic and egalitarian preferences were associated with stronger norms to reciprocate, higher outgroup and ingroup trustworthiness and trust while spiteful and selfish preferences had opposite effects. The social preferences had both direct and indirect effects (through the norm to reciprocate) on trustworthiness and trust. Ingroup trust was positively correlated with a number of group performance indicators.

Summaries of Articles

Summaries of Articles

The last will: Estate divisions as a testament of to whom altruism is directed.

We use data on estate divisions to study to whom altruistic preferences are directed. Insofar bequests are given without the prospect of future personal benefits in mind, they are presumably intrinsically motivated. Hence, estate divisions provide a rare opportunity to study intrinsically motivated prosocial behavior in the field. The empirical analysis is based on data from digitized estate reports for all individuals in Sweden who passed away in 2002 and 2003. The data show in detail how the decedents distributed their bequests. We find that family members, both genetic (offspring) and non-genetic (partner), receive the lion’s share of the estates. Other relatives, friends and strangers (represented by charities) receive only very small shares of the total estate wealth. The results suggest that intrinsically motivated altruism is primarily directed towards close family members.

Altruistic Preference Models of Low-Carbon E-Commerce Supply Chain

With the gradual popularity of online sales and the enhancement of consumers’ low-carbon awareness, the low-carbon e-commerce supply chain (LCECSC) has developed rapidly. However, most of the current research on LCECSC assumes that the decision-making body is rational, and there is less research on the irrational behavior of the e-platform altruistic preference. Therefore, aiming at the LCECSC composed of a single e-platform and a single manufacturer, this paper establishes two basic models with or without altruistic preference. Additionally, this paper combines the characteristics of online sales and assumes that altruistic preference is a proportional function of commission, then establishes a commission-based extended model with altruistic preference to further explore the influence of commission on its altruistic preference. The current literature does not consider this point, nor does it analyze the influence of other parameters on the degree of altruism preference. By comparing the optimal decisions and numerical analysis among the models, the following conclusions can be drawn that: (1) different from the traditional offline supply chain, the profit of the dominator e-platform is lower than the profit of the follower manufacturer; (2) when the consumers’ carbon emission reduction elasticity coefficient increases, service level, sales price, carbon emission reduction, sales, supply chain members profits, and system profit increase, ultimately improving economic and environmental performances; (3) the altruistic preference behavior of the e-platform is a behavior of ‘profit transferring’. The moderate altruistic preference is conducive to the stable operation and long-term development of LCECSC.

Impacts of altruistic preference and reward-penalty mechanism on decisions of E-commerce closed-loop supply chain

This study considers two incentive mechanisms, the reward-penalty mechanism (RPM) and the altruistic preference (AP). An E-commerce closed-loop supply chain consisting of a remanufacturer and a network recycling platform (the platform) is constructed to examine the recycling service and the quality improvement. Three models are developed to study how RPM and AP affect recycling decisions and models are also extended to multiple recycling periods to explore how profits and recycling quantity change with time under two incentive mechanisms. The findings show that the RPM and AP help to improve recycling service level, quality improvement level, and recycling quantity. However, under the influence of the platform's AP, the RPM is not always conducive to raising the recycling price. The influence of the platform's AP on recycling price is affected by the quality improvement cost parameter. Only when the RPM intensity is higher than the threshold, RPM can benefit remanufacturer. Consumer surplus is higher with AP and RPM both considered, so consumers can benefit from the two incentive mechanisms. The social welfare first increases and then decreases with the RPM intensity, but increases with the AP coefficient if the reference point of the remanufacturer's profit is small. Although the AP causes a decrease in the platform's profit in the early period of recycling, it can increase recycling quantity and the remanufacturer's profit over time. Moreover, both the remanufacturer and the platform can benefit from two incentive mechanisms and eventually obtain higher profits over time.

Contribution to a Public Good with Altruistic Preferences

This paper presents a model of private provision of a public good where individuals in a group have altruistic preferences and care about the private and public good consumption of the other members of the group. I show that increasing the level of altruism increases the Nash level of the public good, demonstrating that caring about others improves public good provision. I then compare the Nash level of the public good to the benchmark level of provision by a social planner who aggregates the preferences of the group. I find that if there are non-contributors to the public good in a Nash equilibrium, income inequality can cause over-provision of the public good as compared to the planner’s benchmark. Over-provision can occur because the poorest in the society do not contribute and the richer individuals contribute to the public good as a way to improve the welfare of the poor. These results indicate that public goods cannot substitute the role of government income transfers to the poor even when individuals are altruistic if the distribution of incomes is highly unequal.

Impact of Altruistic Preference and Government Subsidy on the Multinational Green Supply Chain under Dynamic Tariff

A surge in tariffs poses an enormous challenge to the development of multinational green supply chains, which could be mitigated by altruistic preferences and government subsidies. By developing a Stackelberg game analytical framework and designing different scenarios, we deduce the stakeholder’s optimal solutions in each case and compare them to evaluate the impact of manufacturer altruistic preferences and government subsidies on the multinational green supply chain under dynamic tariff. Then we show that: (i) with the increasing tariff rates, either altruistic preferences or government subsidies can promote the green supply chain. (ii) No matter what strategy adopts in the supply chain, it is beneficial to the retailer while harmful to the manufacturer with altruistic preference. (iii) Government subsidies or altruism preferences will lead to free-riding, but the former is conducive to the stable supply chain. (iv) Compared with the production cost subsidy, the green R&D subsidy encourages the green level, but the former contributes to increasing the participant profits. (v) Subsidies and altruistic preference, which simultaneously work in the supply chain, will further boost the greening but aggravate the manufacturer's loss and destroy the supply chain stability. To further enhance the green level and the participant revenue, we also propose the contracts of two-part tariff and profit-sharing to coordinate the supply chain. Lastly, we perform a comparative analysis of the different scenarios utilizing numerical examples and formulate managerial insights accordingly.

How Should E-Commerce Platforms Subsidize Retailers with Logistics Constraints during an Epidemic Scenario? Considering Power Structure and Altruistic Preference

To maintain the sustainable development of a platform’s economy, e-commerce platforms put forward various subsidy programs to retailers selling on them during COVID-19. This paper investigates an e-commerce platform’s decision on subsidizing a retailer selling on it with logistics constraints during an epidemic scenario, with a focus on the role of power structure and altruistic preference. By constructing two Stackelberg game models, the research obtains the optimal subsidy under two power structures (i.e., the dominant platform and the weaker platform), respectively. The comparison between them shows that the conditions of the dominant platform giving subsidies (both altruistic preference and logistics constraints should be higher enough) are stricter than the weaker platform. Considering the same altruistic preference and logistics constraints, the optimal subsidy provided by the weaker platform should always be not less than the dominant platform. However, the weaker platform, surprisingly, can get more utility by lowering its altruistic preference voluntarily when the commission fee is low. No matter what the power structure is, the optimal subsidy increases with the logistics service coefficient and altruistic preference, and the dominant member’s profit/utility is not less than the weaker one, which confirms “the first mover advantage”. Finally, more managerial implications to the platform-retailer systems are discussed.