We show that, if giving is equivalent to not taking, impure altruism could account for List's (2007) finding that the payoff to recipients in a dictator game decreases when the dictator has the option to take. We examine behavior in dictator games with different taking options but equivalent final payoff possibilities. We find that the recipients tend to earn more as the amount the dictator must take to achieve a given final payoff increases, a result consistent with the hypothesis that the cold prickle of taking is stronger than the warm glow of giving. We conclude that not taking is not equivalent to giving and agree with List (2007) that the current social preference models fail to rationalize the observed data.

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Abstract:We design an experiment to test whether incomplete crowding out in dictator games can be rationalized by the impurely altruistic preferences. By giving the recipients an endowment of varying levels, we create an environment in which crowding out may occur. We find that the behavior of 66 percent of the dictators can be rationalized by the impurely altruistic utility function.Keywords: Dictator Game, Impure Altruism, Incomplete Crowding Out JEL Classifications: C91, D01, D64, H30, H41 * We would like to thank Asen Ivanov for patience and many helpful comments and insights. We would also like to thank Rachel Croson, Doug Davis, Catherine

The Alchian and Allen theorem predicts that it will be harder to find “good” apples in the State of Washington, a prime apple‐growing region, than in, say, New York City, where the addition of shipping charges makes “bad” apples comparatively more expensive. We recast the theorem as a testable proposition by explicitly taking the supply side into account and identifying plausible scenarios in which a fixed cost either has no effect on the relative prices of high and low quality grades of the same good in distant markets or, indeed, causes more of the bad apples to be shipped out.