Warm‐Glow Giving and Freedom to be Selfish

Warm‐glow refers to prosocial behaviour that causes the actor to experience positive feelings, apart from its social implications. We study an individual who enjoys taking a prosocial action that incurs a private cost because such actions improve his social image. A private cost obtains only in the presence of a more selfish option, implying a preference for freedom to behave selfishly. We provide behavioural foundations for this model by...