and

We conduct double-anonymous dictator experiments to explore the role of altruism in motivating subjects ’ behavior. We vary the extent to which an anonymous recipient is deserving of aid and investigate its effect on the allocation of a fixed pie by student subjects. This is accomplished by including as treatments: (1) an anonymous student subject and (2) an established charity. We find that a significant increase in donations occurs when we increase the extent to which a donation goes to a recipient generally agreed to be “deserving. ” We conclude that subjects are rational in the way they incorporate fairness into their decisions. Journal of Economic Literature Classification Numbers: A13, C91, D64. © 1996 Academic Press, Inc. How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortunes of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it. —Adam Smith (1969, p. 47) ⁄ The authors thank Jim Andreoni, Sheryl Ball, Rob Gilles, Allen Goodman, Elizabeth Hoffman, Andrew Schotter, Vernon Smith, two anonymous referees, and the editor of this journal for their comments and assistance at various stages of the research. V. Smith provided data from experiment