Do financial markets affect prosocial behavior?

Do financial markets affect prosocial behavior? Economic theories, stressing the stability of prosocial preferences, suggest market outcomes will have little impact on prosocial behavior. Psychological theories, stressing the role of positive affect, suggest better market outcomes will increase prosocial behavior. However, analyzing ~3 million volunteer behaviors, we instead find that prosocial behavior is maximized when stock market returns are near zero (on “normal days”); market losses *and* market gains both decrease prosocial behavior. The market's best day decreased volunteer participation by 18% (p<0.0001) and volunteer output by 88% (p<0.0001), while the worst day decreased volunteer participation by 17% (p<0.0001) and volunteer output by 49% (p<0.0001). We theorize that volunteering requires affective costs and generates risky affective outcomes. If volunteers’ moods are too negative, volunteers will not help (lacking sufficient affective energy), but if volunteers’ moods are too positive, volunteers will also not help (fearing it could “ruin” their positive moods).