Via Overcoming Bias:

Once upon a time, three groups of subjects were asked how much they would pay to save 2000 / 20000 / 200000 migrating birds from drowning in uncovered oil ponds. The groups respectively answered $80, $78, and $88 [1]. This is scope insensitivity or scope neglect: the number of birds saved - the scope of the altruistic action - had little effect on willingness to pay.

Why?

People visualize “a single exhausted bird, its feathers soaked in black oil, unable to escape” [4]. This image, or prototype, calls forth some level of emotional arousal that is primarily responsible for willingness-to-pay - and the image is the same in all cases. As for scope, it gets tossed out the window - no human can visualize 2000 birds at once, let alone 200000. The usual finding is that exponential increases in scope create linear increases in willingness-to-pay - perhaps corresponding to the linear time for our eyes to glaze over the zeroes; this small amount of affect is added, not multiplied, with the prototype affect. This hypothesis is known as “valuation by prototype”.

An alternative hypothesis is “purchase of moral satisfaction”. People spend enough money to create a warm glow in themselves, a sense of having done their duty. The level of spending needed to purchase a warm glow depends on personality and financial situation, but it certainly has nothing to do with the number of birds.

Categories: Incentive Centered Design, Philanthropy