What is Altruism?
Altruism in behavioral economics refers to the willingness to sacrifice personal resources to benefit others, even when there is no expectation of reciprocation. It challenges the standard economic assumption that people are purely self-interested maximizers.
How it works
Laboratory experiments using dictator games consistently show that people give away 20-30% of endowments to anonymous strangers, far more than a self-interested model predicts. Pure altruism is motivated by concern for others’ welfare, distinct from warm-glow giving (which is about the pleasure of giving) and strategic altruism (which expects future reciprocity). Neuroimaging studies show that charitable giving activates the same reward circuits as receiving money.
Applied example
An anonymous donor who contributes to a disaster relief fund for a country they will never visit, with no tax benefit and no public recognition, is exhibiting genuine altruistic motivation rather than reputation-based or strategic giving.
Why it matters
Understanding altruism helps economists explain charitable giving, volunteering, and prosocial behavior that cannot be reduced to disguised self-interest, and helps fundraisers design more effective appeals.
