On Sharing Benefits Created by Costly Help

Cases in which a costly helping act by a benefactor can greatly improve the outcomes of a beneficiary abound. Such help conforms with prevalent social norms and can increase collective welfare. We study how the surplus created through such help is shared by the benefactor and the beneficiary. We hypothesized that aspects of the situation, such as relative wealth, social distance, whether the help increased gains or prevented losses, and perspective may result in variations in this division. In two experiments, we compare participants' judgments (N = 695) and participants' bargaining choices (N = 617 dyads). In both tasks, the proposed compensation for the cost incurred, while the benefits of helping exceeded the cost and was affected similarly by the manipulated factors. We observed pro-social equalizing of outcomes, less indebtedness to family benefactors than to commercial ones, and sensitivity to the fact that help-seeker was suffering a loss. However, whereas the judgments allocated to the beneficiary about 80% of the surplus generated, in (consequential) minimal bargaining, the surplus was split more equally, as expected by economic theory. This gap raises doubts about the validity of using nonconsequential measures.