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Demand for Giving to Multiple Charities: An Experimental Study

Demand for Giving to Multiple Charities: An Experimental Study We study how competition among charities affects individuals’ giving behavior. We characterize situations where charities benefitting substitute or complementary causes incentivize donations by offering subsidies in the form of rebates. Our theory predicts that an increase in the rebate rate offered by a given charity relative to a substitute charity will shift donations away from the substitute charity, but this “stealing” effect is not expected when complementary charities are considered. Our model further characterizes the conditions under which total donations increase with rebates. We test the model in an experimental setting, and demonstrate that the experimental results support our theoretical predictions. We derive the demand for giving as rebates vary for both substitute and complementary causes. The social net benefit of rebates is calculated by comparing campaign costs with new donations generated. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of the European Economic Association Oxford University Press

Demand for Giving to Multiple Charities: An Experimental Study

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References (49)

Publisher
Oxford University Press
Copyright
© The Author(s) 2018. Published by Oxford University Press on behalf of European Economic Association.
ISSN
1542-4766
eISSN
1542-4774
DOI
10.1093/jeea/jvy011
Publisher site
See Article on Publisher Site

Abstract

We study how competition among charities affects individuals’ giving behavior. We characterize situations where charities benefitting substitute or complementary causes incentivize donations by offering subsidies in the form of rebates. Our theory predicts that an increase in the rebate rate offered by a given charity relative to a substitute charity will shift donations away from the substitute charity, but this “stealing” effect is not expected when complementary charities are considered. Our model further characterizes the conditions under which total donations increase with rebates. We test the model in an experimental setting, and demonstrate that the experimental results support our theoretical predictions. We derive the demand for giving as rebates vary for both substitute and complementary causes. The social net benefit of rebates is calculated by comparing campaign costs with new donations generated.

Journal

Journal of the European Economic AssociationOxford University Press

Published: Jun 1, 2019

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