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Social Norm and Giving with Indivisibility of Money: An Experiment on Selfishness, Equity, and Generosity

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We study a dictator game considering selfishness, equity, and generosity. The dictators first indicate their willingness to give on a decision form and then allocate 10 yuan cash to the receiver in an envelope. The cash consists of 10 banknotes of 1 yuan in treatment 1 (high divisibility) and 2 banknotes of 5 yuan in treatment 2 (low divisibility). Treatment 2 only has three choices of giving (0,5,10). 30 % of individuals take ceilings or floors rather than the standard rounding in treatment 2. However, the individual roundup and rounddown behaviors cancel each other at the aggregate level. (JEL: C91, D03, E03, M59)
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Keywords: dictator game; divisibility of money; equity; generosity; selfishness; social norm

Appeared or available online: February 1, 2019

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