Dictating the Risks - Experimental Evidence on Norms of Giving in Risky Environments

We study if and how social preferences extend to risky environments. By providing experimental evidence on different versions of dictator games with risky outcomes, we establish that social preferences of players who give in standard dictator games are best described by concerns for the distribution of ex ante chances to win rather than considerations of ex post payoff distributions. We find that the propensity to give in a standard dictator-game serves as a good predictor for behavior in risky situations: those who transfer more money in the dictator game are more likely to equalize the ex ante situation, i.e. payoff chances in other games. We further find that decision-makers give up less income than in the standard dictator game when giving increases only the chances of the recipient to gain income rather than increasing the recipient's income for sure. Our results thereby shed important light on how existing theories of social preferences can extend to a risky environment.