Why I'm considering giving to beggars.

"This won't work because people will react the way I think."

"No, it will work because people will react the way I think."

"You can't just assume everyone will think the same way as you. Here's some anecdata to prove everyone thinks the same way I do."

Please help me here, because I'm failing to see the difference. (Granted, I think in both cases it's not so much "everyone thinks the way I do" as it is "sufficiently many people think the same way I do", but all the same.)

I think what you are leaving out of your analysis is that, in this scenario, there is no compulsion to help the beggars. Thus, if everyone actually is helping they are doing for their own reasons: that it is good, that it is right, that they want to help. I find it hard to imagine that a significant number doing so would then take advantage of the same system in the manner that you describe.

"But", you say "it is ridiculous to even assume that everyone is going to willfully give as such in the first place." This much is obvious, so trying to comment on the above utopian ideal has its limits. I am inclined to believe, however, that if everyone who actually would be willing to help beggars of their own accord to make things better did help that it is likely that this would only be done in such numbers that the beggars could be helped but not such that it would become such a lucrative market as posters have described.

I still fail to see how you demonstrated that. You have failed to take into consideration important variables that I have attempted to address. In particular, you have applied a type of thinking that some people have today to a situation that would necessarily require them to have a different type of thinking. It doesn't make a whole lot of sense to simply transfer it over as such. Granted, we don't have a whole lot of experience with a society where everybody is individually motivated to help, but I think you'll find at the very least that the people who are altruistically inclined to help the homeless or what have you these days don't really decide to swindle everyone.

Also, it does not require everyone to think the same way for this to happen; in fact, very few people have to think this way.

I'm not sure I agree that 1 in 100 is "very few", but point taken.

I don't mind other people giving to beggars, but one thing I have noticed is that beggar-friendly cities tend to attract far more beggars (San Francisco and Vancouver are two that come to mind).

This point is simply irrelevant unless you mean to suggest that the increase is due to people trying to take advantage of the lucrative beggar market rather than working.

… Which would require everyone to think the same way, which doesn't happen in reality, which is why I've deliberately ignored the absolute extreme. The OP was referring at worst to a utopia, at best (and most likely) to a "near utopia" using imperfect language to communicate such, while I was bringing that utopia down to earth by showing that it only takes 0.25% of the population taking advantage of kindness in order for the problem to become worse than it already is. We already know that all people do NOT think exactly the same, and so arguing with absolutes is pointless.

"This point is simply irrelevant unless you mean to suggest that the increase is due to people trying to take advantage of the lucrative beggar market rather than working."

That is precisely what I suggest. Any time a power efficiency is discovered, people move in to take advantage of it. This has been happening since the dawn of life. In this case, it is an efficiency for acquiring money. The more people give to beggars, the easier it will be to live off the proceeds of begging, the more people will consider it a better use of their time compared to what they're doing now. Quite obviously, efficiency won't be the only factor in the decision (other factors, such as pride, come into play as well), but each factor will be weighted differently by different people. It is often said, every man has his price. And though that statement is technically absolute, I do not believe it absolutely, nor is it meant to be taken that way.