HEC Research Papers Series,
HEC Paris

Abstract: Warm-glow refers to other-serving behavior that is valuable for the actor per se, apart from its social implications. We provide axiomatic foundations for warm-glow by viewing it as a form of preference for larger choice sets driven by one's desire for freedom to act selfishly. Specifically, an individual who experiences warm-glow values the availability of selfish options even if she plans to act unselfishly. Our theory accommodates the empirical findings on motivation crowding out and provides clear-cut predictions for empirically distinguishing between warm-glow and other motivations for prosocial behavior, a task of obvious importance for policy. The choice behavior implied by our theory subsumes Riker and Ordeshook (1968) on voting and Andreoni (1989, 1990) on the provision of public goods.

Keywords: Warm-Glow; Freedom of Choice; Motivation Crowding Out; Altruism; Philanthropy; Public Goods; Ricardian Equivalence; Voter Turnout

JEL-codes: D11; D64; D81

53 pages, August 20, 2013

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