Does culture matter to prosocial behavior? Evidence from a cross- ethnic lab experiment Xunzhou Ma Fengwei Sun Southwest University for Nationalities, China

1. Preamble

 Philosophy of ‘Self-regarding-Competition- General Equilibrium’ is the foundation of neoclassical economics.  It fails to account for a large range of anomalies.  Prosocial preferences —Altruism; Reciprocity; Inequality Aversion; Warm-Glow)

1. Preamble  How to account for the existence of prosocial behavior?  Cultural explanations

Objective Cross-ethnic lab experiment: Examine the existence of prosocial behavior ——behavioral differences between ethnicities. Assess whether, and if so, in what ways, different cultural backgrounds generated any observed behavioral differences between ethnicities.

2. The Experiment

Sample and Game Sample: Students of three ethnicities of China A total of 90 subjects were equally divided between three ethnicities. —Han: the major ethnicity, live in a commercial economic society. —Zang: the minor ethnicity, practice nomadism. —Bouyi: the minor ethnicity, practice agriculture.

Sample and Game Game: public good provision game —a group was formed out of five subjects, and subjects were randomly grouped in each round. —subjects were endowed with 50 tokens each at the beginning of each round and each token was converted into money. —each token held in private earned one token for the participant only whereas each token placed in the public good earned 0.5 times the token for each member of group.

Sample and Game —subjects received information feedback about the actual mean group contribution at the end of each round. — 10 rounds in each experimental situation.

Sample and Game Experimental situations: —Group structure 1: groups of random ethnicities (diverse group). 10 rounds —Group structure 2: groups of randomly divided subjects within their own ethnicity (homogeneous group). 10 rounds —Group structure 3: groups where ethnicity of one subject is different from the other four’s (one ethnicity dominant group). 10 rounds

3. Findings of The Experiment

Result 1 Ethnic Bouyei and Han are supportive of declining trends of contributions, whereas the results from ethnic Zang show a roughly increasing trend.

Result 2 EthnicityZang vs. BouyeiBouyei vs. HanHan vs. Zang Group Structure GS1GS 2 GS3GS 1 GS2GS 3 GS 1 GS 2 GS3 Mann- Whitney Test P-value < < <0.0 0 Ethnic composition plays a significant role in behavioral differences between ethnicities. “one ethnicity dominant group” shaped the larger ethnic differences in contribution between ethnicities.

Result 3 The ethnic Zang holds stronger reciprocity preference than the other two ethnicities.

Ethnicity Variable ZangBouyeiHan CB it GS1GS2GS3GS1GS2GS3GS1GS2GS3 CB it (0.00) *** 0.17 (0.00) *** (0.13) (0.12) 0.39 (0.00) *** (0.00) *** 0.35 (0.00) *** 0.16 (0.01) *** 0.24 (0.10 ) * Guess it 0.95 (0.00) *** 0.82 (0.00) *** 0.76 (0.00) 0.77 (0.00) *** 0.63 (0.00) *** 0.76 (0.00) *** 1.10 (0.00) *** 0.60 (0.00) *** 0.54 (0.00) *** AVReal it (0.27) (0.05) ** 0.09 (0.59) (0.33) (0.04) ** (0.01) *** (0.23) (0.07) * (0.67)

4. The Explanatory Power of Culture

Dimensions of culture Culture of a particular people is a shared set of beliefs, values, conventions, ethnic affiliations and way of economic life. Focus on the following dimensions of culture —Participation —Outgroup Rejection —Religion —Market Interaction —Centralization of Power

ParticipationOutgroup Rejection Answer for each organization and each activity (1=Active; 2=Inactive; 3=No) : Do you mind if you have these types of people as neighbors? (1=I don’t mind; 2= I don’t know; 3=Prefer not) Religious AttitudesMarket Interaction Extent of agreement on these conceptions: (1=Strongly disagree; 2= Disagree; 3=Neutral; 4=Agree; 5=Strongly agree) What proportions of these necessities are purchased from markets (0% indicates the necessity is self-sufficient, while 100% is totally purchased from market ) Centralization of Power Has some family member who makes decisions of these home affairs alone according to his/her family status (1= has; 0=has not)

Result 1: Religious attitudes Being more religious may induce stronger prosocial behavior. Ethnic Zang believe in Mahayana Buddhism that people pray for delivering all living creatures from torment as the highest priority of spiritual practice.

Result 2: Market interaction The higher level of market interactions gives rise to the more self-regarding behavior. Ethnic Han has the highest level, and this makes negative impact on the intensity of prosocial behavior of them.

Result 3: Centralization of power Subjects who suffer more from tyranny in family relations may behave in a more other-regarding manner. Ethnic Zang exhibited a higher degree of centralization of power which may contribute to their prosociality.

5. Conclusion and Research Limitations

Conclusion Culture is a useful variable to uncover economic behavior. ‘Religious attitudes’, ‘Market interaction’, and ‘Centralization of power’ are responsible for the prosociality.

Research Limitations The design of the questions in terms of the dimensions of culture was relatively crude. We only addressed some dimensions of culture. Field research

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