Loss Sharing and Social Distance: An Experimental Study

We investigate the prosocial behaviour of decision-makers in the context of financial losses. We find that in the dictator game, the loss transferred to other people occupying subsequent positions on the social distance scale behaves non-monotonically (it initially drops and then rises). Further, those effects tend to be smaller when the dictator game is replaced by the ultimatum game. Finally, we find that for the 20th ranked person and higher, decision-makers are prone to transfer a higher amount of loss to that person than willing to receive it from her. It means that egoistic motive dominates the altruistic one starting from a place no. 20 on a social distance scale.