Pro-social Preferences and Risk Aversion with Different Payment Methods: Evidence from the Laboratory

The mobile payment technology has converted many of our face-to-face transactions virtual. With the advance of smart devices and financial technologies in place and the shock of COVID-19, economic transactions involving mobile payments are becoming increasingly preferred globally. For instance, using a mobile to purchase goods is faster, more hygiene and private than cash payment. However, empirical evidence is scarce for whether people would react differently when they are paid with mobile or cash. In this paper, we aim to fill this gap. In particular, we examine whether cash and mobile payment methods have an impact on prosocial decisions and risk attitudes using standard laboratory games in China. In dictator, ultimatum games as well as the conventional Holt and Laury (2002) risk assessment, we find significant payment effects that people are more generous when they are using the mobile payment method compared to cash; while we find an insignificant payment effect in risk attitude.